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Asian Tea RI review (May apply)

Asian Tea & Exports Ltd. Logo

•    This company belongs to a well-diversified Asian group.
•    ATEL has been posting profits amidst all odds.
•    RI appears fully priced based on its financial data. 
•    Cash surplus investors may consider long term investment.

ABOUT COMPANY: 
Asian Tea & Exports Ltd. (ATEL) is an Asian group company. It is actively engaged in the trading of pulses like Whole Pigeon Peas (Toor), Yellow Peas, Red Lentil, Urhat, Green Peas, Chickpeas, etc. both in International and Domestic markets. It is also actively engaged in the trading of various foodstuff products like raw cashew nuts, sugar, soya bean, sesame seed, spices, etc. both in the International and Domestic markets. The company is also engaged in domestic trade and exports of different types of Rice from India to many countries.

It is also engaged in trading and exports of tea and engaged in tea plantation & manufacturing through
different group companies.

Asian Group having its interest spread over Tea Plantation & Manufacturing, Domestic & International trading of Tea and other Commodities and Real Estate Development industries. The Asian group via different group company owns tea gardens in North India like - Matigara TeaEstate, located in the Darjeeling district producing both Black & Green Tea, Ligripookrie Tea Estate, located in Sivasagar District in Assam which produces the Orthodox and CTC teas, Indong Tea Estate producing CTC tea in Dooars region and Doyapore Tea Estate in Cachar, Assam. Asian Group has been recognised by the Government of India as a star export house.

ISSUE DETAILS:
ATEL is offering the right shares in the ratio of 1 share for every 1 share held as on the record date of November 09, 2021. It will be issuing 10000000 equity shares of Rs. 10 each at a fixed price of Rs. 15 per share to mobilize Rs. 15.00 cr. The issue opens for subscription on November 18, 2021, and will close on December 02, 2021. Post allotment, shares will be listed on BSE and CSE (Calcutta Stock Exchange). ATEL is spending Rs. 0.40 cr. for this RI expenses and from the balance it will utilize Rs. 14.30 cr. for working capital and Rs. 0.30 cr. for general corporate purpose. 

The issue is solely lead managed by Finshore Management Services Ltd. and CAMEO Corporate Services Ltd. is the registrar to the issue, whereas the registrar to the company is S K Infosolutions Pvt. Ltd. 

Post RI, ATEL's current paid-up equity capital of Rs. 10 cr. will stand enhanced to Rs. 20 cr. Based on the rights issue pricing, it is looking for a market cap of Rs. 30 cr. As of September 30, 2021, promoters holding was 66.44%

FINANCIAL PERFORMANCE: 
On the financial performance front, on a consolidated basis, ATEL posted a turnover of Rs. 123.88 cr. with a net profit of Rs. 3.67 cr. for FY21. For the three months of FY22 ended on June 30, 2021, it has earned a net profit of Rs. 0.38 cr. on a turnover of Rs. 16.80 cr. 

SCRIP PERFORMANCE: Based on the data available on BSE Website (Scrip Code: 519532)
The scrip closed cum-right at Rs. 25.65 on November 04, 2021. It opened at Rs. 19.90 on an ex-rights basis on November 08, 2021, and since then it has posted a high/low of Rs. 21.50 / Rs. 18.00. It last closed at Rs. 19.25 on November 16, 2021, and based on this quote, its market cap stands at Rs. 38.50 cr. The scrip has marked the last 52 weeks high/low of Rs. 21.94 / Rs. 10.16 (on ex-rights basis).


Conclusion / Investment Strategy

This is a small player in the FMCG segment. This segment is gaining ground and has steady growth prospects going forward. Based on its earnings, the RI is fully priced. Hence cash surplus investors may consider an investment with a long term perspective.

Reviewer recommends Subscribing to the issue for Long Term.

Review By Dilip Davda on Nov 16, 2021

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

More Asian Tea & Exports Ltd. RI Views / Analysis / Recommendations ...

The Asian Tea Rights Issue Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if Asian Tea Rights Issue worth investing. The Asian Tea Rights Issue Note sets the Rights Issue expectations in systematic way which tells you if Asian Tea Rights Issue good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Asian Tea Rights Issue by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.


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