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• GICL is operating in a highly competitive segment of logistics services.
• It has posted an average performance for the last two fiscals.
• Based on its financial data so far, the issue appears greedily priced.
• Well-informed/cash surplus/risk seekers may park funds for the long term.
PREFACE:
The company came with its maiden IPO for mobilizing Rs. 5.17 cr. at a price of Rs. 24 per share in September 2016. Hem Securities Ltd. had a mandate at that time. Now the company is having a self-managed RI issue at a fancy price. Its price movements in the last year indicate that the RI is greedily priced.
ABOUT COMPANY:
Globe International Carriers Ltd. (GICL) provides complete logistics services including transportation of all types of industrial goods, bulk transportation, and other related services according to the requirements of Customers. It provides transportation by open/ closed body Vehicles and by two/three/four wheeler vehicle transportation along with services of packing and unpacking of goods.
GICL is an ISO 9001:2015 certified company for providing integrated logistics Solutions and is an approved transporter by the Indian Banks Association. Its goods transportation business serves a broad range of industries, including metal and metal products, textiles, apparel, furniture, appliances, pharmaceutical products, rubber, plastics, wood, glass, telecom products automotive parts, and machinery. The company also provides services by vehicles hired to provide timely and quality services to clients. The variety of goods transportation vehicles in its fleet and vehicles hired also enables it to serve a diverse mix of consignments. Further, the Company is shifting from its own fleet to a market fleet for better functioning of the transportation Services.
The company has remained successful in augmenting its business from various leading Private Sector Companies and Public Sector Companies and they have also been awarding repeat work orders which are testimony of the Company's committed service. Also, presently the company has received a work order from Bharat Heavy Electricals Limited, Birla Ericsson Opticals Limited, Steel & Industrial Forgings Limited, and Vindhya Telelinks Limited for transportation services. The company serves with a strength of 200+ Employees and 20 branches in PAN India, with a vast client base of more than 150 customers.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 4823640 equity shares of Rs. 10 each at a fixed price of Rs. 49.50 per share to mobilize Rs. 23.88 cr. The issue opens for subscription on October 04, 2023, and will close on October 13, 2023. The company is offering RI in the ratio of 6 for 25 to eligible stakeholders as of the record date of September 22, 2023. The full amount is to be paid along with the application for the number of shares applied. Post allotment, shares will lbe listed on NSE SME. The company is spending Rs. 0.20 cr. for this RI process and from the net proceeds, it will utilize Rs. 18.00 cr. for the construction of the warehouse, and Rs. 5.68 cr. for general corporate purposes.
While this RI is self-managed by the company itself, Navigant Corporate Advisors Ltd. is the advisor to the issue and Link Intime India Pvt. Ltd. is the registrar of the issue.
Post-RI, GICL's current paid-up equity capital of Rs. 20.10 cr. will stand enhanced to Rs. 24.92 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 123.37 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, GICL has posted a total revenue/net profit of Rs. 107.76 cr. / Rs. 1.44 cr. (FY22), and Rs. 113.86 cr. / Rs. 1.92 cr. (FY23). As of March 31, 2023, its paid-up capital was Rs.20.10 cr. with a support of Rs. 8.15 cr. in free reserves.
DIVIDEND POLICY:
The offer document is silent on its dividend policy. 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: GICL (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 49.10 on September 21, 2023, and opened on an ex-right basis at Rs. 51.25 on September 22, 2023. Since then, it has marked a high/low of Rs. 51.25 / Rs. 46.55. The scrip last closed at Rs. 51.00 as of October 03, 2023. For the last 52 weeks, it has posted a high/low of Rs. 71.00 / Rs. 33.75.
The promoters' holding has declined from 74.18% as of November 17, 2022, to 70.79% as of March 31, 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. 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 Globe International Carriers 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 Globe International Carriers Rights Issue 2023 worth investing. The Globe International Carriers Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Globe International Carriers Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Globe International Carriers Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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