• The company underwent a change of name and management.
• Its financial performance are not in line with the asking price.
• It has vast carried forward losses which may take a longer time to wipe out.
• There is no harm in skipping this aggressively priced RI.
ABOUT COMPANY:
Integra Essentia Ltd. (IEL) - (erstwhile known as Integra Garments & Textiles Ltd.) was incorporated as "Five Star Mercantile Private Limited" on August 6, 2007, as a private limited company which was converted to a public limited company in January 2012.
Five Star Mercantile Private Limited entered into a Composite Scheme of Arrangement and Amalgamation with the division of Morarjee Textiles Limited called 'the Integra Division' and Morarjee Holdings Private Limited. This Composite Scheme of Arrangement and Amalgamation was approved by the Hon'ble Bombay High Court vide its order dated June 29, 2012. Consequently, the name of the Company was changed to "Integra Garments and Textiles Limited" on August 2, 2012.
Pursuant to this amalgamation, the main object of IEL shifted to carry on the business of manufacturing, along with trading, dealing, importing, exporting, and selling textiles and fabrics. It deals with men's, women's and children's clothing and wearing apparel garments and dresses of every kind, nature and description as per the market trends.
On July 14, 2021, it was acquired by Mr Vishesh Gupta upon completion of the open offer, and pursuant to the Share Purchase Agreement dated March 31, 2021, the management of the Company underwent a change.
It is currently engaged in the business of Life Essentials i.e. food (agro products), clothing (textiles and garments), infrastructure (materials and services for construction and infrastructure development) and energy (materials, products and services for the renewable energy equipment and projects) and other ancillary products and services required to sustain the modern life.
IEL intends to take on a lease of about 2000 acres of land at different locations for producing certified Organic Agro Products for further expansion. As of December 31, 2021, it had a workforce of 7 employees, which is in expansion mode.
ISSUE DETAILS:
To part finance its funding needs for working capital (Rs. 36.15 cr.) and general corporate purposes (Rs. 12.30 cr.), IEL is coming out with a rights issue (RI) of 276684812 equity shares of Re. 1 each at a fixed price of Rs. 1.80 per share to mobilize Rs. 49.80 cr. The company is issuing 33 shares for every 13 shares held by the shareholders as of the record date of May 05, 2022. The issue opens for subscription on May 16, 2022, and will close on June 10, 2022. Post allotment, shares will be listed on BSE and NSE. IEL will be spending Rs. 1.36 cr. for this RI process.
The issue is solely lead managed by Hexaxis Advisors Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue.
Post RI, IEL's current paid-up equity capital of Rs. 10.90 cr. (108997047 shares) will stand enhanced to Rs. 38.57 cr. (385681859 shares). Based on the RI pricing, the company is looking for a market cap of Rs. 69.42 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, IEL has posted a turnover/net profits - (loss) of Rs. 0.02 cr. /Rs. - (2.33) cr. (FY19), Rs. 0.15 cr. /Rs. - (13.40) cr. (FY20) and Rs. 0.04 cr. / Rs. - (0.61) cr. (FY21). For the first nine months of current FY22 ended on December 31, 2021, it has marked a profit of Rs. 0.55 cr. on a turnover of Rs. 18.53 cr.
Based on the above financial performance, the RI is aggressively priced.
DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer documents. It will adopt a prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 535958:
The scrip last closed on cum-right basis at Rs. 1.95 on May 02, 2022, and opened on the ex-rights basis at Rs. 1.93 on May 09, 2022. Since then, it has marked a high/low of Rs. 1.93 / Rs. 1.93. The scrip last closed at Rs. 1.93 as of May 09, 2022. Based on this quote, its post-RI market cap stands at Rs. 74.44 cr. The scrip has posted the last 52 weeks high/low of Rs. 1.93 / Rs. 1.06. Promoters' holding is at 63.55% for the last three quarters ended on March 31, 2022.
Review By Dilip Davda on May 15, 2022
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.
