Hazoor Multi RI review - (May apply)

•    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. 

ABOUT COMPANY:
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. 

ISSUE DETAILS:
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. 

FINANCIAL PERFORMANCE:
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. 

DIVIDEND POLICY:
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. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 532467 (FV Rs. 10).
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.