• This is the 2nd RI from the company since February 2024.
• The company marked boosted performance post consolidation with GDPL, a subsidiary.
• Based on its financial performance, the RI appears fully priced.
• Well-informed/cash surplus investors may park moderate fund for long term.
ABOUT COMPANY:
Globe Textiles (India) Ltd. (GTIL) has been a leader in the textile industry, offering a complete range of innovative and tailor-made products. From fiber to fashion, it prioritizes sustainability and customer satisfaction, delivering a diverse portfolio of yarns, fabrics, home textiles, and garments. The Company is also engaged in trading of yarns, denims and Non denims fabrics, Shirting fabrics and Jeans. Also it performs job work for many clients.
The Company based on its experience and its standards, conforms to major specifications and customer requirements. It focuses on benchmark product quality, customer centric approach, people focus, ethical business practices and good corporate citizenship. It has been developing a marketing strategy for products. The Company’s proficiency lies in understanding the prevailing trends in all the products which it markets in addition to the buying preferences of consumers and accordingly manufacture quality fabrics to assure them of product quality, comfort and fit uniformity.
Further, its experience also lies in identifying the gaps and foraying into the untapped market of garment segments with distinct products. Further it has appointed Business and Commission Agents for Middle East/ Gulf Countries to increase the presence in foreign countries. Its customer list includes John Players, Splash, Lifestyle, BARE, Spykar, Steve and Barry’s, to name a few. Its offer document is silent on its employees’ strength.
ISSUE DETAILS:
The company is coming out with Rights Issue (RI) of 150139596 equity shares of Rs. 2 each at a fixed price of Rs. 3 per shares to mobilize Rs. 49.00 cr. This is the 2nd RI since February 2024. The RI is opening for subscription on January 24, 2025, and will close on February 06, 2025. The company is offering RI in the ratio of 1 for 2 to its eligible stakeholders as of the record date of January 17, 2025. The full amount it to be paid on application for the number of shares applied. Post allotment, shares will be listed on NSE. The company is spending Rs. 0.64 cr. for this RI process, and from the net proceeds, it will utilize Rs. 15.00 cr. for working capital, Rs. 14.33 cr. for acquisition of equity shares in Globe Denwash Pvt. Ltd. (GDPL), Rs. 16.81cr.for lending fresh loans to Globe Denwash, Rs. 2.22 cr. for general corporate purposes.
The RI is self-managed by the company, and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Bigshare Services Pvt. Ltd. is the registrar to the company.
Post-RI, company’s current paid-up equity capital of Rs. 60.06 cr. will stand enhanced to Rs. 90.49 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 135.13 cr. The company marked error on page no. 37 of the offer document on its post-RI equity capital base, and also on its GCP expenses data on page no. 19 and page no. 49.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a standalone/consolidated basis) posted total income/net profit of Rs. 401.83 cr. / Rs. 4.51 cr. (FY23 - standalone), and Rs. 470.05 cr. / Rs. 8.86 cr. (FY24- consolidated). For H1 of FY25 ended on September 30, 2024, it (on a consolidated basis) earned a net profit of Rs. 6.52 cr. on a total income of Rs. 276.72 cr. It posted improved performance on the basis of consolidated numbers.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has voluntarily adopted a dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: GLOBE (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 4.98 on January 16, 2025, and opened on an ex-right basis at Rs. 4.35 on January 17, 2025. Since then, it has marked a high/low of Rs. 4.52 / Rs. 3.75. The scrip last closed at Rs. 3.79 as of January 24, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 5.43 / Rs. 2.35.
The promoters’ holding has been constant at 42.11% for the last three quarters ended with December 31, 2024. The counter is well maintained above the RI price to tempt investors.
Review By Dilip Davda on January 24, 2025
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
