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Hazoor Multi RI review (May apply)

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•    HMPL is an infrastructure and Real Estate construction company.
•    It has posted mind-boggling performance for the last 21 months. 
•    The sustainability of such performance going forward is a major concern.
•    Well-informed cash surplus investors may consider investing in this lucrative RI. 

Hazoor Multi Projects Ltd. (HMPL) is an Infrastructure and Real Estate Company. It is an infrastructure development and construction Company engaged in the development of roads and highways. Its construction business involves engineering, procurement, and construction ("EPC") work for construction projects on a contract basis, including in the roads and highways sector. In addition, HMPL is currently developing a "National Highway No 548-A from Section Waken Pali to 2 lanes with paved shoulder". 

HMPL is also engaged in the business of land development and acquisition of land and landed properties. It is also actively engaged in the construction of buildings, multi-storied buildings, residential complexes, commercial complexes, townships and highways. It has entered into joint ventures and work agreements with the government, semi-government bodies, private corporate bodies, public and private trusts, public sector undertakings, and Indian Corporates and is desirous of inviting investments through equity participation, loans & borrowings, Preference Shares or any other securities and instruments and land by way of purchase take on lease or otherwise own, hold, occupy, manage, control, construct, alter, develop, pull down, improve, repair, renovate, decorate, work, build, plan, layout, and to sell, let out, transfer, mortgage, charge, assign, hire, sub-lease or otherwise dispose of the same as may be expedient in line with ongoing projects of the Company. As of September 30, 2022, it had 13 employees on its payroll. 

The company is coming out with its rights issue (RI) of 5075000 equity shares of Rs. 10 each at a fixed price of Rs. 88 per share to mobilize Rs. 44.66 cr. The company is offering 1 equity share against 2 equity shares held by the eligible stakeholders as of the record date of January 20, 2023. The issue opens for subscription on February 03, 2023, and will close on February 20, 2023. As an investor's friendly gesture, the company is asking only Rs. 22 per share on the application for the number of shares applied. The balance of Rs. 66 per share is to be paid by one or more calls by the company from time to time. Post allotment, shares will be listed on BSE. HMPL is spending Rs. 0.20 cr. for this RI process, and from the net proceedings, it will spend Rs. 33.56 cr. for working capital, and Rs. 10.90 cr. for general corporate purposes. 

Navigant Corporate Advisors Ltd. is the sole lead manager for this RI and Link Intime India Pvt. Ltd. is the registrar of the issue. 

Post RI, HMPL's current paid-up equity capital of Rs. 10.15 cr. will stand enhanced to Rs. 15.23 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 133.98 cr. 

On the financial performance front, for the last three fiscals, HMPL has posted a turnover/net profit of Rs. 0.35 cr. / Rs. 0.05 cr. (FY20), Rs. 24.30 cr. / Rs. 0.43 cr. (FY21), and Rs. 112.64 cr. / Rs. 2.48 cr. (FY22). 

As per the unaudited results submitted to the exchange, for H1 of FY23, HMPL has reported a net profit of Rs. 15.24 cr. on a turnover of Rs. 392.25 cr. For 3Qs of FY23, it earned a net profit of Rs. 28.41 cr. on a turnover of Rs. 581.35 cr. 

The sudden boost in the top and the bottom lines for the last 21 months of working is raising eyebrows. 

The company has not declared any dividends for the last five fiscals. It will adopt a prudent dividend policy post-listing, based on its financial performance and future prospects. 

The scrip last closed on cum-right basis at Rs. 120.60 on January 19, 2023, and opened on an ex-right basis at Rs. 105.60 on January 20, 2023. Since then, it has marked a High/Low of Rs. 116.00 / Rs. 95.55. The scrip last closed at Rs. 107.90 as of January 31, 2023. It has posted the last 52 weeks' high/low of Rs. 120.90 / Rs. 18.02. The counter is currently under ASM ST: Stage 1. The promoter's holding has been constant at 25.93% for the last three quarters. (ended in December 2022). This counter is well managed above the RI price by vested interests. 

Conclusion / Investment Strategy

The company is in infrastructure and real estate construction which is a highly competitive and fragmented area. The sudden boost in its top and bottom lines for the last 18 months working raises eyebrows and concern over the sustainability of such performance going forward. Lower promoter’s holding also remains a major worry. Well-informed cash surplus investors may consider parking funds for long-term rewards.

Review By Dilip Davda on January 31, 2023

Review Author

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. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda, a freelance journalist

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: ).

More Hazoor Multi Projects Limited RI Views / Analysis / Recommendations ...

The Hazoor Multi Projects 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 Hazoor Multi Projects Rights Issue 2023 worth investing. The Hazoor Multi Projects Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Hazoor Multi Projects Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Hazoor Multi Projects Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.