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• 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.
Review By Dilip Davda on January 29, 2022
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The Joonktollee Tea & Industries Rights Issue Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if Joonktollee Tea & Industries Rights Issue worth investing. The Joonktollee Tea & Industries Rights Issue Note sets the Rights Issue expectations in systematic way which tells you if Joonktollee Tea & Industries Rights Issue good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Joonktollee Tea & Industries Rights Issue by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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