Bandaram Pharma RI review - (May apply)

•    BPPL is in the business of recycled paper supply.
•    Its last two fiscals' performance is on a minuscule level.
•    The counter is under GSM - Stage 4 with restricted trades. 
•    Well-informed investors may park funds for long-term rewards as promoters' holding is 75% and the RI is at par value. 

ABOUT COMPANY:
Bandaram Pharma Packtech Ltd. (BPPL) - erstwhile known as Shiva Medicare Ltd. - is now under the new management post NCLT approval and resolution arrived at with the change of name. BPPL has forayed into the paper industry since 2022 after discontinuing computer sales and AMC business. Currently, the company is into processing and supply of recycled paper. It acquires the material from indigenous and imported suppliers and supplies end products to small and medium-sized paper mills in the western and eastern regions. As of April 30, 2023, it had 27 employees on its payroll. 

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 9000000 equity shares of Rs. 10 each at par value to mobilize Rs. 9.00 cr. The issue is opening for subscription on July 12, 2023, and will close on July 20, 2023. The company is offering RI in the ratio of 3 for 1 to eligible stakeholders as of the record date of June 30, 2023. The full amount is to be paid on the application for the number of shares applied. Post allotment, shares will be listed on BSE. BPPL is spending Rs. 0.43 cr. for this RI and from the net proceeds, it will utilize Rs. 4.41 cr. for the conversion of unsecured loans from promoters, Rs. 0.50 cr. for investment in subsidiary VSR Paper & Packaging, Rs. 1.50 cr. for the acquisition of companies to achieve inorganic growth, and Rs. 2.16 cr. for general corporate purposes.  

Bajaj Capital Ltd. is the sole lead manager and Cameo Corporate Services Ltd. is the registrar of the issue. 

Post-RI, BPPL's current paid-up equity capital of Rs. 3.00 cr. will stand enhanced to Rs. 12.00 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 12 cr. 

FINANCIAL PERFORMANCE:
On a consolidated basis, for the last two fiscals, BPPL has posted a turnover/net profit - (loss) of Rs. NIL / Rs. - (0.01) cr. (FY22), and Rs. 18.92 cr. / Rs. 0.26 cr. (FY23). Thus it has posted minuscule performance. The sudden hike in its paid-up equity capital post-RI may face servicing issue. 

DIVIDEND POLICY:
The company has not declared any dividends since 2015. It will adopt a prudent dividend policy, based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 524602 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 76.59 on June 05, 2023, and opened on an ex-right basis at Rs. 27.98 on July 03, 2023. Since then, it has marked a high/low of Rs. 27.98 / Rs. 7.57. The scrip last closed at Rs. 27.98 as of July 10, 2023. For the last 52 weeks, it has posted a high/low of Rs. 27.98 / Rs. 7.57. 

The promoters' holding has been constant at 75% for the last three quarters ended on March 31, 2023. The counter is well managed above the par value to lure investors with a minuscule volume. 

The counter is under GSM-Stage 4 and Trading is restricted.