Jyoti Structures RI - Feb. 25 review - (May apply)

•    This is the 2nd RI from the company since March 2024 (a year of its 1st RI).
•    It is in the business of EPC contracts for power transmission and related works.
•    The company has turned the corner from FY24 post coming out of NCLT.
•    Based on its financial performance, the issue is fully priced.
•    Well-informed investors may park moderate funds for medium to long term.

ABOUT COMPANY:
Jyoti Structures Ltd. (JSL) is in the business of Engineering, Procurement and Construction (EPC) execution of projects in three verticals: a) Power Transmission Lines up to 800 kV, b) Substations up to 800 Kv, c) Distribution Project. 

As part of the scope of services, the Company has the following in-house capability:
a) Design and engineering, b) Tower testing facility to test prototype transmission towers up to 1,200 kV, c) Three transmission tower manufacturing plants, two in Nashik and one in Raipur with a combined capacity of 1,16,160 MT annually, d) Construction services.

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 client list includes 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.

The company uses various Software Viz. Computer Aided Analysis; BOCAD, Itower, AutoCAD and tools such as Digitization of Toposheets, Digital Terrain Models, Theodolites and GID equipments which help it in ROW resolution. As on date, JSL has totally manufactured over 1.4 million metric tonnes of transmission towers and other structures. As of the date of filing this offer document, it had 166 employees on its payroll and the contract labourers at various sites as required.

ISSUE DETAILS:
The company is coming out with its second Rights Issue (RI) of 311929934 equity shares of Rs. 2 each at a fixed price of Rs. 16.00 per shares to mobilize Rs. 499.09 cr. The RI is opening for subscription on February 17, 2025, and will close on March 03, 2025. The company is offering RI in the ratio of 9 for 26 to its eligible stakeholders as of the record date of February 10, 2025. The company is asking for full money on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 20.00 cr. for this RI process, and from the net proceeds, it will utilize Rs. 152.07 cr. for payment of NCLT approved solution plan, Rs. 205.00 cr. for funding cost of funds/margin being raised from banks and FIs, Rs. 122.02 cr. for general corporate purposes. 

The RI 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. 180.23 cr. will stand enhanced to Rs. 242.62 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 1940.92 cr. (If fully convertible warrants get converted in to equity capital, then the overall capital of the company shall be Rs. 242.96 cr. reflecting its market cap at Rs. 1943.72 cr.)

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted total income/net profit/ - (loss) of Rs. 231.07 cr. / Rs.  – (4.07) cr. (FY23), Rs. 463.02 cr. / Rs. 28.86 cr. (FY24). For 9M of FY25 ended on December 31, 2024, it posted a net profit of Rs. 23.63 cr. on a total income of Rs. 337.53 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. The offer document is silent on its dividend policy.

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 513250 (FV Rs. 2)
The scrip last closed on cum-right basis at Rs. 26.94 on February 07, 2025, and opened on an ex-right basis at Rs. 23.48 on February 10, 2025. Since then, it has marked a high/low of Rs. 23.48 / Rs. 18.53. The scrip last closed at Rs. 19.22 as of February 14, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 37.06 / Rs. 16.45. 

The promoters’ holding has NIL% for the last three quarters ended with December 31, 2024. The counter is well maintained above the RI price by vested interest operators to tempt investors. The counter is jacked up with average volumes.