Growington Ventures BSE RI review - (Avoid)

•    GVIL is engaged in trading/importing/exporting/distribution of variety of products, with major focus on fruits and other agri products. 
•    It posted average financial performance for the reported periods. Surge in its bottom lines for the last 21 months working raise eyebrows.
•    It is operating in a highly competitive and fragmented segment.
•    There is no harm in skipping this at par bet which can be termed as “High Risk/No Return” RI.

PREFACE:
The company is offering its RI on May 14, 2025, and its offer document is dated April 23, 2025, but the documents were made available on BSE Web site only on noon of May 12, 2025. Four-times paid-up capital post RI may witness some issues as its earnings are minuscule. 

ABOUT COMPANY:
Growington Ventures India Ltd. (GVIL) -erstwhile known as VMV Holidays Ltd.- is engaged in various activities/trading/importing/exporting/ distributing all sort of merchandises. 

The company exports and imports premium-quality fruits. The company offers an extensive portfolio of fresh produce, including Apples, Green Apples, Oranges, Mandarins, Pears, Kiwis, Dragon Fruits, Avocados, Red Globe Grapes, Plums, Nectarines, Peaches, Cherries, Blueberries, Grapefruits, Mango Stem, Ram Bhutan, Longan, Dates, Tamarind, and many others.

The company has just 12 employees as of March 31, 2024. Thus, it is missing the latest tally of its human strength. 

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 481661820 equity shares of Re. 1 each at par value to mobilize Rs. 48.17 cr. The RI is opening on May 14, 2025 and will close on June 12, 2025. The company is offering RI in the ratio of 3 for 1 to its eligible stakeholders as of the record date of April 29, 2025. Post allotment, shares will be listed on BSE. The company is asking full money on application for the number of shares applied. GVIL is spending Rs. 0.75 cr. for this RI process, and from the net proceeds, it will utilize Rs. 36.95 cr. for working capital, Rs. 10.47 cr. for general corporate purposes.

The RI is self-managed by the company itself and Purva Sharegistry (India) Pvt. Ltd., is the registrar to the issue. 

Post-RI, company’s current paid-up equity capital of Rs. 16.06 cr. will stand enhanced to Rs. 64.22 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 64.22 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted a total income/net profit/ - (loss) of Rs. 20.56 cr. / Rs. 1.26 cr. (FY23), Rs. 35.06 cr. / Rs. 1.14 cr. (FY24). For 9M of FY25 ended on December 31, 2024, it earned a net profit of Rs. 2.80 cr. on a total income of Rs. 27.69 cr. Thus, boosted bottom lines in pre-RI period appears to be a window dressing to tempt investors for garnering funds. 

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

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 539222 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 2.22 on April 28, 2025, and opened on an ex-right basis at Rs. 1.50 on April 29, 2025. Since then, it has marked a high/low of Rs. 1.97 / Rs. 1.41. The scrip last closed at Rs. 1.73 as of May 12, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 3.82 / Rs. 1.12.  Soon after the RI plans, the counter marked movement and quoted above the RI price with market operations from the vested interest counters. The counter is currently under ESM: Stage 1.

The promoters’ holding has been constant at 42.70% for the last three quarters ended with March 31, 2025. The counter is well managed above the par value to lure investors.