Choice Intl - (May apply)

•    CIL is a holding company of many financial services subsidiaries. 
•    The company has fared well in the reported financial data.
•    It last paid a dividend of 10% for FY19 and then skipped till now. 
•    Based on its price movement, RI is lucratively priced. 
•    Investment may be considered with a long term perspective. 

ABOUT COMPANY:
Choice International Ltd. (CIL) is a holding company and operate our business through a web of our Subsidiaries, Wholly Owned Subsidiaries and Step Down Subsidiaries. It offers financial services across all platforms catering to retail and institutional clients, corporates and state and central governments. The services are bifurcated into Retail services (B2C) and Institutional Services (B2B & B2G). The B2C services include Equity & commodity broking, Wealth Services and NBFC Services. The B2B services comprise Management consulting, Investment Banking and government services like Infrastructure Consulting and Government Advisory.

ISSUE DETAILS:
To part finance its needs for funds for investing in material subsidiary (Rs. 50.25 cr.), CIL is coming out with a rights issue (RI) of 9951200 equity shares of Rs. 10 each at a fixed price of Rs. 51 per share to mobilize Rs. 50.75 cr. The company is offering 1 share against every 4 shares held by the shareholders as of the record date i.e. January 20, 2022. The RI opens for subscription on February 01, 2022, and will close on February 15, 2022. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.50 cr. for this RI process. 

The issue is solely lead managed by Saffron Capital Advisors Pvt. Ltd. and Cameo Corporate Services Ltd. is the registrar to the issue. 

Post RI, CIL's current paid-up equity capital of Rs. 39.81 cr. will stand enhanced to Rs. 49.76 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 253.76 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, CIL has (on a consolidated basis) posted revenue/net profits of Rs. 134.22 cr. / Rs. 12.43 cr. (FY20) and Rs. 175.82 cr. / Rs. 16.71 cr. (FY21). For H1 of FY22 ended on September 30, 2021, it has earned a net profit of Rs. 24.65 cr. on a revenue of Rs. 124.85 cr. Thus it has posted growth for all these years in its top and bottom lines. As of December 31, 2021, the promoter's holding was 64.31%.

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE:531358
The scrip closed on cum-rights basis at Rs. 274.15 as of January 18, 2022, and opened on an ex-rights basis at Rs. 224.90 on January 19, 2022. Since then it has posted a high/low of Rs. 231.70 /Rs. 180.00. For the last 52 weeks, it has marked a high/low of Rs. 249.43/ Rs. 87.84. It last closed at Rs. 204.00 as of January 28, 2022, and based on this closing, its market cap amounts to Rs. 1015.02 cr. 

DIVIDEND POLICY:
The company paid a dividend of 10% from FY13 to FY19 and thereafter, it skipped. It will follow a prudent dividend policy based on its financial performance and future prospects.