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• This is the company that had a name and fame few years back.
• It is trying to be out of wood with the fund raising plans.
• Though the RI is at a discount to its last traded price, it still remains a risky bet.
• There is no harm in skipping this pricey and risky bet.
PREFACE:
This company was investors darling once upon a time, but it went in dock due to reasons known better by the management. It is trying to be back on track and raising these funds to meet its requirements. However, huge carried forward losses of recent years, it may take some time even though it is back on track with profits for H1 of FY24. Its offer document has many mismatches and missing the proper links and required information.
ABOUT COMPANY:
Jyoti Structures Ltd. (JSL) is in the business of Engineering, Procurement and Construction (EPC) execution of projects in three verticals i.e. power distribution, power transmission lines up to 800 kV, substation infra.
The Company has constructed over 31,000 circuit KMs of transmission lines, over 1,800 bays of substations and electrified over 37,325 villages. Its major clients are central or state government bodies/agencies as well as private power distribution companies. They include owners of power transmission and distribution. Over the four-decade history of the company, it has executed projects in and exported products to clients in countries USA, United Kingdom, Canada, France, South Africa, Bangladesh, Tanzania, Kenya, Kuwait, Rwanda, Tajikistan, United Arab Emirates, Algeria, Philippines, Kenya, Georgia, etc.
As of the date of filing this offer document it had a total 1198 employees on its payroll and added contract labourers where needed.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 116420710 equity shares of Rs. 2 each at a fixed price of Rs. 15 per share to mobilize Rs. 174.63 cr. The RI opens for subscription on April 15, 2024, and will close on April 29, 2024. The company is offering RI in the ratio of 6 for 37 to its eligible stakeholders as of the record date of March 21, 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. 7.00 cr. for this RI process, and from the net proceeds, it will utilize Rs. 65.00 cr. for NCLT approved resolution plan, Rs. 60.00 cr. for the cost of bank fund raising, and Rs. 42.63 cr. for general corporate purposes.
The issue is solely lead managed by Arihant Capital Markets Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 146.19 cr. will stand enhanced to Rs. 169.47 cr. Its equity will further enhance to Rs. 179.02 cr. post conversion of convertible warrants issued. Based on the RI pricing, the company is looking for a market cap of Rs. 1342.65 cr. on the final equity capital post RI and conversion of warrants.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit/-(loss) of Rs. 0.16 cr. / Rs. - (1767.14) cr. (FY21), Rs. 5.44 cr. / Rs. - (34.21) cr. (FY22), and Rs. 231.07 cr. / Rs. - (4.07) cr. (FY23). For H1 of FY24 ended on September 30, 2023, it earned a net profit of Rs. 13.70 cr. on a total income of Rs. 270.00 cr. For the first half of FY24, on a consolidated basis it earned a net profit of Rs. 14.73 cr. on a total income of Rs. 332.97 cr. Thus it has just turned the corner for the first half of FY24
However, due to whooping losses for FY21 and FY22, it has carried forward losses, that may take time to wipe out and surge in paid-up equity paid-up capital may face servicing issue.
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: 513250 (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 23.19 on March 20, 2024, and opened on an ex-right basis at 20.98. XX on March 21, 2024. Since then, it has marked a high/low of Rs. 25.39 / Rs. 19.90. The scrip last closed at Rs. 23.62 as of April 10, 2024. For the last 52 weeks' it has posted a high/low of Rs. 34.05 / Rs. 5.87. The counter is currently under ASM LT: Stage 4.
The promoters' holding has been NIL for the last three quarters ended with December 31, 2023. The counter is well managed above the RI price to tempt investors for this pricey and risky bet.
Review By Dilip Davda on April 10, 2024
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 Jyoti Structures Limited Rights Issue 2024 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 Jyoti Structures Limited Rights Issue 2024 worth investing. The Jyoti Structures Limited Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Jyoti Structures Limited Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Jyoti Structures Limited Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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