Ajooni Bio NSE RI review - (May apply)

•    The company is engaged in the manufacturing and marketing of cattle feed, animal healthcare supplements.
•    This is the 2nd RI from the company since November 2022.
•    It is operating in a highly competitive and fragmented segment. 
•    It has posted an average financial performance so far. 
•    Well-informed investors may park moderate fund for the medium to long term rewards.

PREFACE:
This is the 2nd RI from the company in last two fiscals. Its 1st RI came in November 2022 in the ratio of 29 for 30 at a fixed price of Rs. 6 per share to mobilize Rs. 29.02 cr.  and now it is offering 1 for 1 RI at a fixed price of Rs. 5 per share to mobilize Rs.  xx cr. For 1st RI the mandate was with Navigant Corporate Advisors Ltd. while for 2nd RI, the company is self-managing it. 

ABOUT COMPANY:
Ajooni Biotech Ltd. (ABL) is engaged in manufacturing, producing, processing and supplying of Cattle feed, Nutrients related to cattle feed and manufacturing & production of Animal health care supplements. It is registered with Department of Industries, Govt. of Punjab as Small Scale Industry (SSI) and also registered with Department of Dairy Development, Govt of Punjab.

The company has entered into an agreement with other Brands like Sahaj, Mother Dairy, and IFFCO for manufacturing of Cattle feed and Distribution of Cattle feed and feed supplements in the states of Punjab, Himachal Pradesh, Jammu & Kashmir, Haryana, Rajasthan and western Uttar Pradesh. The products offered by it are processed using quality ingredients sourced from the trustworthy vendors of the market. Its range is appreciated for their features such as hygiene, accurate composition and easy to use. The offered range is processed under Quality certified manufacturing unit. ABL's manufactured veterinary products find use in the treatment and cure of many diseases in animals. 

Besides, the company also undertakes contracts for analytical method developments and stability studies. Available in air tight & hygienic packs, these medicines are highly appreciated for their accurate composition, precise pH value, effectiveness and longer shelf life.

ABL manufactures cattle feed & supplement under own brand name of "AJOONI". For Marketing of its own brand in the Market it has a strong professional team which covers the area of Punjab, Haryana, Uttar Pradesh, Rajasthan and Jammu and Kashmir. Its products are well accepted in the market. National Dairy Development Board Dairy Services (hereinafter called "NDDB Dairy Services") has expressed their interest in purchasing the cattle feed and feed supplement for distribution to the milk producer companies. The offer document it silent on its dividend policy and the employee's strength.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 87613721 equity shares of Rs. 2 each at a fixed price of Rs. per share to mobilize Rs. 43.81 cr. The RI opens for subscription on May 21, 2024, and will close on May 31, 2024. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of May 07, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on NSE. The company is spending Rs. 0.49 cr. for this RI process and from the net proceeds, it will utilize Rs. 8.07 cr. for financing acquisition of land, site development and other civil work, Rs. 8.75 cr. for acquiring plant and machinery, Rs. 16.00 cr. for working capital, and Rs. 10.50 cr. for general corporate purposes. 

The issue is self-managed by the company, and Cameo Corporate Services Ltd. is the registrar to the issue. 

Post-RI, company's current paid-up equity capital of Rs. 17.52 cr. will stand enhanced to Rs. 35.05 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 87.61 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit of Rs. 74.08 cr. / Rs. 1.05 cr. (FY22), and Rs. 74.78 cr. / Rs. 1.12 cr. (FY23). Thus it marked static top and bottom lines for the last two fiscals. For 9M of FY24 ended on December 31, 2023, it earned a net profit of Rs. 1.25 cr. on a total income of Rs. 62.47 cr. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: AJOONI (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 6.55 on May 06, 2024, and opened on an ex-right basis at Rs. 6.30 on May 07, 2024. Since then, it has marked a high/low of Rs. 6.90 / Rs. 5.95. The scrip last closed at Rs. 6.50 as of May 18, 2024. For the last 52 weeks' it has posted a high/low of Rs. 6.90 / Rs. 3.38. The counter is currently under LT ASM-1.

The promoters' holding has been constant at 26.44% for the last two quarters ended with March 31, 2024. The counter is well managed above the RI price to lure investors.