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• BSL hasn't lived up to the confidence of investors and betrayed their trust.
• Its recent financial data is worrying some.
• At par value RI is also not attractive considering its current market price.
• Promoters have sold almost the entire holding and have just name-sake holding.
• Investors should avoid such issues to save their hard-earned money.
PREFACE:
The company came with its maiden IPO in the month of June 2018 with a big bang at that time the issue was priced at Rs. 36 per share and it mulled mobilizing Rs. 19.44 cr. The issue was subscribed by 1.85 times and got listed at Rs. 37.25 on the listing date. The IPO was then lead managed by Swastika Investmart Ltd. and Alankit Assignments Ltd. was the registrar. While this time the issue is managed by the company itself and has changed its registrar to Skyline Financial Services Pvt. Ltd.
Now it is coming with a Right Issue at a par value while its current market price is quoting at nearly half of it and the biggest concern is promoter offloading a major chunk in the last year's period. No doubt any issue cannot be below its par/face value and considering the current status of the company, it is trying to get funds at par value from investors while its shares are quoting at almost 50% discount to its RI pricing. It has fared poorly for the last two fiscals and considering all these, it is better to avoid such issues.
ABOUT COMPANY:
Bright Solar Ltd. (BSL) is engaged in assembling DC/AC Solar Pumps and Solar Pump Systems under the registered brand name of "PUMPMAN", "BRIGHT SOLAR", and "BRIGHT SOLAR WATER PUMP". The company is also engaged in EPC contracts for Solar Photovoltaic Water pumps which include supplying, installing and commissioning the pump system along with a comprehensive maintenance contract for a specific period of 1- 5 years. In solar pump systems, BSL is having a wide range of products of DC Solar Pump, Solar Pump Inverter and AC Solar Pump. As of January 01, 2023, it had 18 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a rights issue of 4600000 equity shares of Rs. 10 each at par value to mobilize Rs. 4.60 cr. The company Is offering RI in the ratio of 2 shares for 9 shares held as of the record date of February 06, 2023, to eligible stakeholders. The issue opens for subscription on April 03, 2023, and will close on April 10, 2023. The full amount is to be paid for the number of shares applied along with the application. Post allotment, shares will be listed on NSE SME. BSL is spending Rs. 0.37 cr. for this RI and from the net proceeds, it will utilize Rs. 4.23 cr. for working capital.
BSL is managing the issue and Skyline Financial Services Pvt. Ltd. is the registrar of the issue.
Post RI, the company's current paid-up equity capital of Rs. 20.40 cr. will stand enhanced to Rs. 25.00 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 25.00 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, For the last two fiscals, the company has posted a turnover/net profit - (Loss) of Rs. 24.78 cr. / Rs. 0.18 cr. (FY21), and Rs. 7.49 cr. / Rs. - (7.37) cr. Thus its top and bottom lines nosedived and incurred heavy losses for FY22. As of March 31, 2022, its current paid-up equity capital of Rs. 20.40 cr. is supported by free reserves of Rs. 10.37 cr.
Promoter's holding came down to 0.04% as of March 31, 2022, from 69.72% as of March 31, 2021. Thus promoters have offloaded almost the entire equity in the company that shows their interest in the functioning of the operations of the company.
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: BRIGHT (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 7.90 on February 03, 2023, and opened on an ex-right basis at Rs. 8.20 on February 06, 2023. Since then, it has marked a high/low of Rs. 8.65 / Rs. 5.45. The scrip last closed at Rs. 5.55 as of March 31, 2023. For the last 52 weeks, it has posted a high/low of Rs. 10.48 / Rs. 4.09. The promoter's holding has declined to 0.04% as of March 31, 2022, against 69.72% as of March 2021 indicating the promoter's tendency for this company.
Review By Dilip Davda on April 2, 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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. 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 Bright Solar 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 Bright Solar Rights Issue 2023 worth investing. The Bright Solar Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Bright Solar Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Bright Solar Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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