Covance Soft BSE RI review - (Not Rated)

•    The company is engaged in providing information technology related solutions and services.
•    It marked growth in its top and bottom lines for the reported periods.
•    The RI is attractively priced at par value and makes it a worthy investment.
•    The RI is at a discount of around 69.80% and is a not to miss opportunity.
•    Investors may park funds for medium to long term.

ABOUT COMPANY:
Covance Softsol Ltd. (CSL) is engaged in providing Information Technology (IT) services across various industry sectors. It operates through its service verticals in (i) Enterprise Modernization, (ii) Unified Real-Time Data Platform, (iii) AI Action Orchestration & Workflow Automation, and (iv) Capability Center. Its client portfolio includes domestic and international customers. Over the years, the Company has developed domain expertise in reengineering legacy systems, data migration, process automation, and software transformation. As of June 30, 2025, it had 136 employees on its payroll.

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 7381844 equity shares of Rs. 10 each at par value to mobilize Rs. 7.38 cr. The RI opens for subscription on September 08, 2025, and will close on September 19, 2025. The company is offering RI in the ratio of 1 for 2 to its eligible stakeholders as of the record date of August 29, 2025. The company is asking for full money on application for number of shares applied. Post allotment, RI shares will be listed on BSE. The company is spending Rs. 0.40 cr. for this RI process, and from the net proceeds, it will utilize Rs. 5.50 cr. for repayment of loan., and Rs. 1.48 cr. for general corporate purposes. 

The RI is self-managed by the company itself, and KFin Technologies Ltd. is the registrar to the issue. 

Post-RI, company’s current paid-up equity capital of Rs. 14.76 cr. will stand enhanced to Rs. 22.15 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 22.15 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total income / net profit, of Rs. 61.17 cr. / Rs. 1.26 cr. (FY24), and Rs. 101.70 cr. / Rs. 12.12 cr. (FY25).

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performance and future prospects. However, the offer document is silent on its dividend policy. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 544361 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 39.13 on August 28, 2025, and opened on an ex-right basis at Rs. 30.01 on August 29, 2025. Since then, it has marked a high/low of Rs. 33.11 / Rs. 30.01. The scrip last closed at Rs. 33.11 as of September 05, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 33.11 / Rs. 1.55. Based on its last traded price of Rs. 33.11, the RI is at a discount of around 69.80%. The counter is currently under ESM: Stage 2.

The promoters’ holding has been constant around 73.47% for the last three quarters ended with June 30, 2025. The counter is well managed above the RI price.