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• The company undergone many strides till FY23.
• Currently it is in the manufacturing of process plant equipment and other engineering products.
• It has posted spectacular performances from FY23 onwards.
• The RI is at a discount of around 181% based on its last traded price.
• Investors may park funds for the medium to long term rewards.
ABOUT COMPANY:
Lloyds Engineering Works Ltd. (LEWL) - erstwhile known as Lloyds Steels Industries Ltd. is a process plant equipment manufacturing company. The Company provides, inter-alia, engineering and infrastructure solutions, encompassing designing, engineering, manufacturing, fabrication, and installation of heavy equipment, as well as machinery and systems, for customers of hydrocarbon (oil & gas) sector, steel processing industries, captive power plants used in steel plants, marine sector, ports, heat exchangers being used by nuclear power plants as well as other projects.
It has also started offering services in the civil construction related projects. The Company's three (3) workshops which are located in Murbad, Thane are accredited with ISO 9001:2015 certification by SGS, UK. It is in the process of adding a new workshop in close proximity to its existing workshops. The Company also relies on third-party service providers for fulfilling contractual obligations to customers. The services of third-party service providers, inter-alia, include providing conversion facilities, fabrication, plate bending, plate cutting, assembling etc.
LEWL's key products include, inter-alia, (i) Industrial process plant equipment such as high-quality Pressure Vessels, Columns, Heat Exchangers etc. (ii) Steel plant equipment such as Blast Furnace, Coke Oven, Slab Caster (iii) Waste Heat Recovery Boilers including Atmospheric Fluidized Bed Combustion (AFBC) / Circulating Fluidized Bed Combustion (CFBC) boilers which are used to recover heat from the waste flue gases produced in various industrial processes (iv) Gas / Air dryers, (v) Marine/truck/wagon loading arms, (vi) Naval steering gear & stabilizer systems with controls (Electro-hydraulic & mechanical).
Raw materials for engineering related products primarily comprise of plates, tubes, flanges, fasteners, pipes and related fittings, nozzles etc. sourced in various grades and sizes of steel and alloys of steel, from the open market and imports, bought-out items are sourced from customer / project consultant accredited vendors. Raw materials for civil construction related projects which primarily comprise of cement, thermo-mechanically treated (TMT) bars, ready mix concrete (RMC), construction aggregates, sand, structural steel, are sourced from the open market. Its order book stood at Rs.921.39 cr. as of September 30, 2023. As of September 30, 2023, it had 238 employees on its payroll and is also taking contract laborers as and when needed.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 63464610 equity shares of Re. 1 each at a fixed price of Rs. 15.50 per share to mobilize Rs. 98.37 cr. The issue opens for subscription on December 26, 2023, and will close on January 10, 2024. The company is offering RI in the ratio of 1 shares for 17 shares held by eligible stakeholders as of the record date of December 14, 2023. 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. 2.16 cr. for this RI process and from the net proceeds, it will use 73.62 cr. for working capital, and Rs. 22.59 cr. general corporate purposes.
The issue is jointly lead managed by Mark Corporate Advisors Pvt. Ltd., and Pioneer Investcorp Ltd., while Bigshare Services Pvt. Ltd. is the registrar of the issue.
Post-RI, company's current paid-up equity capital of Rs. 107.89 cr. will stand enhanced to Rs. 114.24 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 83.14 cr. / Rs. 0.50 cr. (FY21), Rs. 59.85 cr. / Rs. 5.95 cr. (FY22), and Rs. 318.41 cr. / Rs. 37.14 cr. (FY23). As per the submission to the BSE, for H1 of fY24, the company has posted a loss of Rs. 31.97 cr. on a total income of Rs. 238.21 cr. Thus since FY23 the company has posted eye catching performances.
DIVIDEND POLICY:
The Company has declared dividend (5%) for the first time for the Financial Year ended March 31, 2022 and thereafter, also (10%) for the Financial Year ended March 31, 2023. Thus it has a dividend policy in place based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 539992 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 49.37 on December 13, 2023, and opened on an ex-right basis at Rs. 45.12 on December 14, 2023. Since then, it has marked a high/low of Rs. 48.00 / Rs. 41.56. The scrip last closed at Rs. 43.63 as of December 21, 2023. For the last 52 weeks' it has posted a high/low of Rs. 57.54 / Rs. 12.51. The counter is currently under ASM LT Stage-4.
The promoters' holding has been constant at 59.78% since period ended on July 01, 2023. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on December 22, 2023
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 Lloyds Engineering Works Rights Issue 2023 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 Lloyds Engineering Works Rights Issue 2023 worth investing. The Lloyds Engineering Works Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Lloyds Engineering Works Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Lloyds Engineering Works Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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