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• BHEL is in the highly competitive and fragmented segment of knitted fabric and garments.
• It has posted a static performance for the last two fiscals.
• Lower promoter's holding is a major concern.
• Well-informed/risk seekers may park funds for long-term rewards.
ABOUT COMPANY:
Bhandari Hosiery Exports Ltd. (BHEL) is one of the leading manufacturers of Knitted Fabric and Garments with strong designing capability. The products are sold by the Company to its domestic and international customers. Over the years, BHEL has established a strong loyal customer base in various countries across continents.
The Company owns a state-of-the-art production facility with designing capability equipped with the latest equipment and technology at village Meherban, Rahon Road, Ludhiana, Punjab, India. Ludhiana, which is an established marketplace for knitted fabrics, garments, and embroidery.
The Company also manufactures, processes, and trades dyed and un-dyed fabrics. The products of the Company are knitted hosiery garments such as t-shirts, pullovers, sweatshirts, Bermuda, polo shirts, tracksuits, pajamas, lowers, ladies' knitted tops with embroidery and prints, etc. These products are sold in domestic as well as overseas markets. It has no Brands of its own. As of the date of filing this offer document, it had 385 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 16911111 equity shares of Re. 1 each at a fixed price of Rs. 4.50 per share to mobilize Rs. 7.61 cr. The issue has already opened for subscription on October 03, 2023, and will close on October 13, 2023. The company is offering RI in the ratio of 3 for 26 to eligible stakeholders as of the record date of September 23, 2023. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. BHEL is spending Rs. 1.10 cr. for this RI process, and from the net proceeds, it will utilize Rs. 4.51 cr. for capex on expansion plans afoot, and Rs. 2.00 cr. for working capital.
The issue is self-managed by the company itself, and Link Intime India Pvt. Ltd. is the registrar of the issue.
Post-RI, the company's current paid-up equity capital of Rs. 14.65 cr. (146526950 shares) will stand enhanced to Rs. 16.34 cr. (163438061 shares). Based on the RI pricing, the company is looking for a market cap of Rs. 73.55 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit of Rs. 226.05 cr. / Rs. 1.67 cr. (FY21), Rs. 283.44 cr. / Rs. 6.27 cr. (FY22), and Rs. 283.31 cr. / Rs. 6.51 cr. (FY23). As the offer document has a copy pest module of financial data info between pages nos. 68 to 152, there appear to be some mismatch/missing links for FY22 and FY23 profit and loss data. However, this data is taken from the other pages (after page no. 152) of the offer documents.
DIVIDEND POLICY:
The company has been paying a dividend of 1% since FY19 regularly. It will continue to follow a prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 512608 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 6.82 on September 21, 2023, and opened on an ex-right basis at Rs. 6.38 on September 22, 2023. Since then, it has marked a high/low of Rs. 6.67 / Rs. 5.71. The scrip last closed at Rs. 6.18 as of October 03, 2023. For the last 52 weeks, it has posted a high/low of Rs. 8.01 / Rs. 3.53.
The promoters' holding has been constant at 24.95% for the last three quarters ended on June 30, 2023. The counter is well-managed above the RI price to lure investors.
Review By Dilip Davda on October 3, 2023
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 the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their 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.
About Dilip Davda
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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The Bhandari Hosiery Exports Rights Issue 2023 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 Bhandari Hosiery Exports Rights Issue 2023 worth investing. The Bhandari Hosiery Exports Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Bhandari Hosiery Exports Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Bhandari Hosiery Exports Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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