Durlax Top NSE SME RI review - (Not Rated)

•    The company is engaged in the business of manufacturing solid surface materials.
•    It marked growth in its top lines for reported periods, but FY26-H1 indicates margins under pressure.
•    Based on its recent financial data, the issue appears aggressively priced.
•    While listing of RI will be on NSE SME Emerge, its offer document refers as NSE, which is giving wrong impression.
•    There is no harm in skipping this pricey and dicey RI bet.

ABOUT COMPANY:
Durlax Top Surface Ltd. (DTSL) is engaged in the business of manufacturing solid surface materials, catering to diverse applications across India through a distribution network of distributors and direct customers. Its products are also exported to international markets including the USA, Mexico, Dubai, ® Bahrain, Greece, and Nepal. The company operates under three brands - LUXOR, ® TM ASPIRON, and HERONITEZ - each offering a comprehensive range of quality solid surfaces designed to meet the evolving needs of customers.

The company is facing few litigation cases involving an amount of Rs. 58.92 cr., that raise major concern. The offer document is silent on its human strength data.

ISSUE DETAILS:
The company is coming out with its 3rd Rights Issue (RI) of 12304497 equity shares of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 49.22 cr. The RI opens for subscription on February 23, 2026, and will close on March 05, 2026. The company is offering RI in the ratio of 37 for 50 to its eligible stakeholders as of the record date of February 12, 2026. The company is asking for full money on application for the number of shares applied. RI shares will be listed on NSE SME Emerge. The company is spending Rs. 3.50 cr. for this RI process, and from the net proceeds, it will utilize Rs. 13.00 cr. for capex on new machinery and civil/mechanical works, Rs. 12.00 cr. for working capital, Rs. 9.50 cr. for new product launch, Rs. 11.22 cr. for general corporate purposes. The market lot for this RI shall be 2000 shares. Though the shares will be listed on NSE SME Emerge, its offer document refers to listing on NSE, giving wrong impression.

The RI is solely lead managed by the company itself., and Integrated Registry Management Services Pvt. Ltd. is the registrar to the issue. Bigshare Services Pvt. Ltd. is RTA to the company.

Post-RI, company’s current paid-up equity capital of Rs. 16.63 cr. will stand enhanced to Rs. 28.93 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 115.73 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total income / net profit, of Rs. 90.76 cr. / Rs. 3.99 cr. (FY24), Rs. 124.82 cr. / Rs. 7.50 cr.  (FY25). For H1 of FY26 ended on September 30, 2025, it earned a net profit of Rs. 3.18 cr. on a total income of Rs. 68.19 cr. Its NAV stood at Rs. 36.60 as of September 30, 2025.

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

SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: DURLAX (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 49.00 on February 11, 2026, and opened on an ex-right basis at Rs. 47.15 on February 12, 2026. Since then, it has marked a high/low of Rs. 50.00 / Rs. 43.25. The scrip last closed at Rs. 43.25 as of February 20, 2026. For the last 52 weeks’ it has posted a high/low of Rs. 53.21 / Rs. 28.03.  

The promoters’ holding has been at 60.57% for quarter ended September 30, 2025.  Vested interest quarters are operating the counter and maintaining it above the RI price to tempt investors.