Joonktollee Tea RI review - (May apply)

•    The company is engaged in tea, coffee and rubber plantations/cultivations.
•    It has reported losses for the last two and half years' financial performance. 
•    The issue is priced at negative P/E considering losses incurred. 
•    RI is lucratively priced if compared with its stock market quote data.
•    Risk seeker cash surplus investors may consider investment for the long term. 

ABOUT COMPANY:
Joonktollee Tea & Industries Ltd. (JTIL) the company that was originally promoted by John Elliot Esq. in 1874 as Joonktollee Tea Co. Ltd. was taken over by the house of Bangurs in 1954 and its name was changed to the current one and since then it has been managing the show. The company is currently in the business of tea and coffee plantations and the cultivation of rubber.  

The Company's tea garden area under cultivation is spread over 1827.55 hectares in North East and South India. The coffee garden area under cultivation is spread over 407.26 hectares in South India. The rubber area under cultivation is spread over 1,008.90 hectares in South India. Promoter's holding as of December 31, 2021, was at 74.99%.

ISSUE DETAILS:
To part finance its needs of funds for repayment of unsecured loans (Rs. 24.50 cr.), JTIL is offering 4142201 equity shares of Rs. 10 each at a fixed price of Rs.60 per share on a rights basis to mobilize Rs. 24.85 cr. It is issuing rights issue in the ratio of 1 for 1 to those shareholders who were holding shares in their name as of the record date on January 19, 2022. The issue opens for subscription on February 04, 2022, and will close on February 18, 2022. Post allotment, shares will be listed on BSE and CSE (Calcutta Stock Exchange). The company will be spending Rs. 0.35 cr. for this rights issue (RI) process. 

The issue is solely lead managed by Narnolia Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. 

Post RI, JTIL's current paid-up equity capital of Rs. 4.14 cr. will stand enhanced to Rs. 8.28 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 49.71 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, JTIL has (on a consolidated basis) posted turnover/net profit (loss) of Rs. 93.06 cr. / Rs. - (24.28) cr. (FY20) and Rs. 107.49 cr. / Rs. - (9.56) cr. (FY21). As per unaudited results for the H1 of FY22 the company has incurred a loss of Rs. - (3.67) cr. on a turnover of Rs. 74.15 cr. Thus for the last two and half years, it has been posting losses. As of September 30, 2021, it's current paid-up equity capital of Rs. 4.14 cr. is supported by free reserves of Rs. 97.48 cr. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE:538092
The scrip closed on cum-rights basis at Rs. 193.20 as of January 17, 2022, and opened on the ex-rights basis at Rs. 132.85 on January 18, 2022. Since then it has posted a high/low of Rs. 141.80 /Rs. 123.50. For the last 52 weeks, it has marked a high/low of Rs. 146.72/ Rs. 66.35. It last closed at Rs. 127.40 as of January 28, 2022, and based on this closing, its market cap amounts to Rs. 105.54 cr. 

DIVIDEND POLICY:
The company pruned its dividend distribution from FY13 and the last dividend paid was for FY17 @5%, and thereafter, it skipped. It will follow a prudent dividend policy based on its financial performance and future prospects.