Integra Essentia RI - June 2024 review - (Avoid)

•    This is the 3rd RI from the company since May 2022. 
•    The last RI was in the month of November 2022.
•    Based on its recent price movements, the issue appears aggressively priced. 
•    There is no harm in skipping this high risk pricey bet. 

PREFACE:
After the change in the management, this company is coming out with its 3rd RI and has surprises one and all. Its first RI came in May 2022 at Rs. 1.80 per share (ratio 33 for 13) to mobilize Rs. 49.80 cr. (mandate was with Hexaxis Advisors), then it came with its 2nd RI in November 2022 at Rs. 7.00 per share (ratio 37 for 200) to mobilize Rs. 49.95 cr. (mandate was with Hexaxis Advisors), and now it is coming out with its third RI at Rs. 3.25 per share (ratio 20 for 119) to mobilize Rs. 49.93 cr. having a mandate with Fast Track Finsec Pvt. Ltd. and Hexaxis as Advisor to the issue.  

ABOUT COMPANY:
Integra Essentia Ltd. (IEL) - erstwhile known as Integra Garments & Textiles Ltd., - had primary object to carry on the business of manufacturing, along with trading, dealing, importing, exporting, and selling textiles and fabrics. The Company dealt 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. In July 2021, the new management took over the company and broadened its objects to venture into dealing, trading of agricultural commodities, life necessities, items of basic human needs, organic and natural products and processed food and other essential goods, energy and infrastructure products among others. 

Presently, the company is engaged in the trading 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. Further recently company has acquired a winery i.e. CHATEAU INDAGE Winery to strengthen its presence in entire supply chain spectrum of consumable goods.

The company is focusing on this segment with a long-term vision. To enhance this business efficiency, company operating winery through a third party to manage business more professionally, however company may change this party in near future at its own discretion. At present, company is not carrying the manufacturing/trading of textiles and garments on its own, but planning to engaged third parties such as contract manufactures etc. As on December 31, 2023, the company had a workforce of 13 (Thirteen), which may increase further as the Company's business is in expansion.

ISSUE DETAILS:
The company is coming out with its 3rd RI since May 2022, and has surprised the market. It is offering 153624538 equity shares of Re. 1 each at a fixed price of Rs. 3.25 per share to mobilize Rs. 49.93 cr. The RI opens for subscription on June 11, 2024 and will close on June 25, 2024. The company is offering RI in the ratio of 20 for 119 shares to its eligible stakeholders as of the record date of June 01, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 1.15 cr. for this RI process, and from the net proceeds, it will utilize Rs. 36.60 cr. for working capital, Rs. 12.18 cr. for general corporate purposes. 

This RI is solely lead managed by Fast Track Finsec Pvt. Ltd., and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Hexaxis Advisors Ltd. is the advisor to the issue.

Post RI, company's current paid-up equity capital of Rs. 91.41 cr. will stand enhanced to Rs. 106.77 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 347 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit/ - (loss) of Rs. 0.01 cr. / - (0.61) cr. (FY21), Rs. 68.61 cr. / Rs. 1.09 cr. (FY22), Rs. 245.50 cr. / Rs. 6.67 cr. (FY23). For 9M of FY24 ended on December 31, 2023, it earned a net profit of Rs. 9.49 cr. on a turnover of Rs. 194.97 cr. 

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. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 535958 (FV Re.1).
The scrip last closed on cum-right basis at Rs. 3.72 on May 30, 2024, and opened on an ex-right basis at Rs. 3.65 on May 31, 2024. Since then, it has marked a high/low of Rs. 3.65 / Rs. 3.38. The scrip last closed at Rs. 3.40 as of June 07, 2024. For the last 52 weeks' it has posted a high/low of Rs. 7.69 / Rs. 2.50. The counter is currently under ESM: Stage 1.

The promoters' holding has been constant at 20.81% for the last three quarters ended with March 31, 2024. The counter is well managed by vested interest parties above the RI price to tempt investors.