Lloyds Enterprises RI review - (Not Rated)

•    The company which is primarily in the business of trading in steel products is now venturing in to real estate through its subsidiary LRDL.
•    The company posted declined profits for FY25 compared to FY24.
•    The RI is at a discount of around 45.61% based on its last traded price.
•    Well-informed investors may park moderate funds for long term.

ABOUT COMPANY:
Lloyds Enterprises Ltd. (LEL) was originally incorporated as Benson Steel Ltd. in 1986 and changed its name to Shree Global Tradefin Ltd. in 1996. In 2023, it changed its name to current one. 

LEL is engaged in the trading of steel products and act as the holding company for Lloyds Realty Developers Limited, Lloyds Engineering Works Limited and Indrajit Properties Private Limited. The activities carried on by the Company till date are in accordance with the object clause of its MOA. The main objects and the objects incidental and ancillary to the main objects of MOA enable the Company to undertake the business of real estate. 

The main objects of LRDL are to undertake real estate activities and it is currently involved in few real estate projects, such as development/redevelopment of housing societies, commercial establishments etc. The Issue Proceeds will be used to subscribe to the NCDs of LRDL, which in turn will use the NCD proceeds in its real estate activities. 

The fund requirements, proposed deployment of funds and the intended use of the Net Proceeds set out above is based on the current business plan, internal management estimates, the Project Report, current circumstances of business, prevailing market conditions and other commercial considerations, of the Company and LRDL. However, these funds requirement and proposed deployment of Net Proceeds have not been appraised by any bank or financial institution.

LRDL has successfully completed real estate projects across Mumbai, Pune and Tirupur, contributing to the development of over 2.91 million sq. ft. of constructed space, spanning residential complexes to commercial developments. The Company has considered to venture into the real estate business but decided to promote LRDL, a subsidiary of the Company, which is engaged in real estate activities. LEL is, therefore, subscribing to the NCDs of LRDL so that LRDL can expand its real estate business. The offer document is silent on its employees’ strength. 

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 254425324 equity shares of Re.1 each at a fixed price of Rs. 39 per share to mobilize Rs. 992.26 cr. The RI opens for subscription on August 25, 2025, and will close on September 08, 2025. The company is offering RI in the ratio of 1 for 5 to its eligible stakeholders as of the record date of August 14, 2025. The company is asking for Rs. 19.50 (50%) per share on application for the number of shares applied, and the rest by not more than two calls from time to time (before March 31, 2027) as decided by the company. Post allotment, RI shares will be listed on BSE and NSE. The company is spending Rs. 44.76 cr. for this RI process, and from the net proceeds, it will utilize Rs. 700.00 cr. for subscription to secured NCD of its subsidiary Lloyds Realty Developers Ltd., Rs. 247.50 cr. for general corporate purposes. 

The RI is self-managed by the company itself, and Bigshare Services Pvt. Ltd. is the registrar to the issue. Mark Corporate Advisors Pvt. Ltd., and Prime Securities Ltd. are the advisors to the issue. 

Post-RI, company’s current paid-up equity capital of Rs. 127.21 cr. will stand enhanced to Rs. 152.66 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 5935.55 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total income / net profit of Rs. 1093.75 cr. / Rs. 174.80 cr. (FY24), and Rs. 1570.93 cr. / Rs. 126.30 cr. It marked degrowth in its bottom line for FY25 that raises major concern. Its RoNW declined to 26.57% for FY25 against 40.38% for FY24. Its NAV increased from 3.40 for FY24 to Rs. 4.07 for FY25. 

DIVIDEND POLICY:
The company has declared  dividends 10% per fiscal, for the reported periods of the offer document. It will adopt a prudent dividend policy based on its financial performance and future prospects. However, its offer document is silent on the dividend policy.

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 512463 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 80.32 on August 13, 2025, and opened on an ex-right basis at Rs. 71.68 on August 14, 2025. Since then, it has marked a high/low of Rs. 78.53 / Rs. 69.06. The scrip last closed at Rs. 71.71 as of August 22, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 88.10 / Rs. 34.05. Based on its last traded price of Rs. 71.71, the RI is at a discount of around 45.61%.

The promoters’ holding has been constant at 73.91% for the last three quarters ended with June 30, 2025. The counter is well managed above the RI price to lure investors.