Manav Infra NSE SME RI review - (Avoid)

•    The company is engaged in the business of civil and infra related constructions and services.
•    It has a carry forward loss of Rs. 8.25 cr. as of March 31, 2024, and a total debt of Rs. 9.18 cr.
•    The company has reported minuscule financial performances so far.
•    It is operating in a highly competitive and fragmented segment. 
•    There is no harm in skipping this “High Risk/Low Return” fully priced offer.

ABOUT COMPANY:
Manav Infra Projects Ltd. (MIPL) is engaged into the business of civil construction services such as piling, excavation, road, construction, land leveling, and also provides complete range of earth moving machines and construction equipments on rend for all type of infra and construction related work. 

Its customer include medium to large size construction and infrastructure companies like Kanakia Spaces, J Kumar Infra, ACC, JP Infra, Simplex Infra, Man Infra, Nirmal Lifestyle etc. Its offer document is silent on its employees’ strength.

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 6836000 equity shares of Rs. 10 each at a fixed price of Rs. 11 per share to mobilize Rs. 7.52 cr. The RI opens for subscription on March 12, 2025, and will close on March 24, 2025. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of February 28, 2025. The company is asking for full money on application for number of shares applied. The minimum lot for application is 4000 shares. Post allotment, shares will be listed on NSE SME. The company is spending Rs. 0.42 cr. for its RI and from the net proceeds, it will utilize Rs. 5.30 cr. for working capital, and Rs. 1.80 cr. for general corporate purposes. 

The RI is solely lead managed by the company itself, and KFin Technologies Ltd. is the registrar to the issue. 

The total paid-up capital post-RI is missing from the Issue data given on page no. 29 of the offer document.

Post RI, company’s current paid-up equity capital of Rs. 6.84 cr. will stand enhanced to Rs. 13.67 cr. Based on RI pricing, the company is looking for a market cap of Rs. 15.04 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit/ - (loss) of Rs. 12.07 cr. / Rs. 0.60 cr. (FY23), Rs. 14.31 cr. / Rs. 1.30 cr. (FY24). For H1 of FY25 ended on September 30, 2024, it marked a net profit of Rs. 0.21 cr. on a total income of Rs. 6.35 cr. Thus, it has posted minuscule financial performances for the reported periods. As of March 31, 2024, it had a carried forward loss of Rs. 8.25 cr., and a total debt of Rs. 9.18 cr. that raises alarm and major concern.

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. However, the offer document is silent on its dividend policy. 

SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: MANAV (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 15.30 on February 27, 2025, and opened on an ex-right basis at Rs. 12.50 on February 28, 2025. Since then, it has marked a high/low of Rs. 12.50 / Rs. 10.75. The scrip last closed at Rs. 11.60 as of March 07, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 21.59 / Rs. 10.75. 

The promoters’ holding has been constant at 73.13% for the last three quarters ended with December 31, 2024. The counter is well managed above the RI price to lure investors.