Jonjua Overseas RI review - (Avoid)

•    The company is engaged in the variety of Businesses which includes Sale of Products (mainly printed books and e-Books), Agriculture, IT and Outsourcing Services that includes Legal and Accounts Outsourcing, and trading of Unlisted Securities to clients.
•    It posted minuscule financial performances for the reported periods with marginal rise in top and bottom lines.
•    Though the RI is at par value, it's a "High Risk/ Low Return" bet.
•    There is no harm in skipping it despite at par issue.

PREFACE:
For this RI, the offer documents were made available on BSE only on December 12, 2024, morning, while the offer document is dated November 26, 2024. The delay in uploading the offer documents on designated exchanges is turning worrisome now a day. Can regulators or concern authorities throw some light on this??

ABOUT COMPANY:
Jonjua Overseas Ltd. (JOL) is engaged in the variety of Businesses which includes Sale of Products (mainly consisting of sale of printed books and e-Books), Agriculture, IT and Outsourcing Services that includes Legal and Accounts Outsourcing, and trading of Unlisted Securities to clients. With the right balance of technical expertise and vast industry knowledge it strives to create customer satisfaction considering the nature of work with an innovative approach maintaining integrity and confidentiality of the business.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 7925339 equity shares of Rs. 10 each at par value to mobilize Rs. 7.93 cr. The RI opens for subscription on December 13, 2024, and will close on December 23, 2024. The full amount is to be paid on application for number of shares applied. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of November 29, 2024. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.33 cr. for this RI process, and from the net proceeds, it will utilize Rs. 6.00 cr. for repayment/prepayment of loans from promoter group including adjustments for RI, and Rs. 1.60 cr. for general corporate purposes. 

The RI is self-managed by the company itself, and Cameo Corporate Services Ltd. is the registrar to the issue. 

Post-RI, company's current paid-up capital of Rs. 7.93 cr. will stand enhanced to Rs. 15.85 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 15.85 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total income/net profit of Rs. 3.17 cr. / Rs. 1.06 cr. (FY22), Rs.3.87 cr. / Rs. 1.18 cr. (FY23), Rs. 4.19 cr. / Rs 1.21 cr. (FY24), For H1 of FY25 ended on September 30, 2024, it marked a profit of Rs. 0.87 cr. on a total income of Rs. 3.00 cr. Thus, its financial performances for the reported periods are on a minuscule level with marginal rise in top and bottom lines. 

DIVIDEND POLICY:
The offer document is silent on its dividend policy. 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: 542446 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 12.50 on November 28, 2024, and opened on an ex-right basis at Rs. 11.45 on November 29, 2024. Since then, it has marked a high/low of Rs. 11.99 / Rs. 10.25. The scrip last closed at Rs. 10.30 as of December 12, 2024. For the last 52 weeks' it has posted a high/low of Rs. 13.50 / Rs. 8.46. 

The promoters' holding has declined to 22.89% as of September 30, 2024, against 31.53% as of Sept. 30, 2023. The counter is well managed above the RI by vested interests to lure investors.