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• MML is engaged in the business of automated solutions for machine tools equipment.
• Its top line marked de-growth and bottom line turned red.
• The issue appears greedily priced.
• There is no harm in skipping this pricey RI.
ABOUT COMPANY:
Marshall Machines Ltd. (MML) is in the business of designing, manufacturing, and deploying solution offerings, providing after sales services for machine tool equipment. Products offered by the Company include single spindle CNC machines, innovative two spindle & four spindle CNC machines, automated robotic CNC machine solutions, and Industry 4.0 products such as Smart Correct Gauging Stations.
The company has grown into a well-regarded player in automated solutions, smart and technologically superior machine tool offerings that enable its clients to enhance productivity, reduce cost per component, and generate a higher return on investment (ROI) from their machines. Constant product innovation, achieved via rigorous research and development, intellectual property generation and protection, has enabled the Company to produce solutions that meet the emerging needs of its clients.
The Company's machines are being used in a number of industries, including the automobile industry, consumer durables and appliances, and general engineering, among others. They are used to manufacture a variety of products such as axles, crankshafts, auto components, fans, and pumps. They are also used to manufacture bearings, gear blanks, bushes, and other similar items. These machines are well-regarded for their quality, dependability, and precision performance. In addition, MML provides its clients with the ability to create and implement customized solutions with the desired flexibility. As a result, customers' unique requirements are met with these customized solutions that are designed to maximize the efficiency with which this equipment are used in their operations. As of March 31, 2023, it had 139 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 10185000 equity shares of Rs. 10 each at a fixed price of Rs. 44.80 per share to mobilize Rs. 45.63 cr. The issue opens for subscription on October 11, 2023, and will close on October 19, 2023. The company is offering RI in the ratio of 7 for 10 to eligible stakeholders as of the record date of September 29, 2023. The full amount is to be paid along with the application for the number of shares applied. Post allotment, shares will be listed on NSE. MML is spending Rs. 0.55 cr. for this RI process and from the net proceeds, it will utilize Rs. 15.15 cr. for working capital, Rs. 6.29 cr. for repayment of loans, Rs. 19.35 cr. technology fee, Rs. 4.29 cr. for general corporate purposes.
Kunvarji Finstock Pvt. Ltd. is the sole lead manager and Bigshare Services Pvt. Ltd. is the registrar of the issue.
Post-RI, MML's current paid-up equity capital of Rs. 14.55 cr. will stand enhanced to Rs. 24.74 cr. Based on the RI pricing, the company is looking for a market cap of Rs.110.81 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, MML has posted a total income/net profit/ - (loss) of Rs. 67.25 cr. / Rs. Xx cr. (FY21), Rs. 60.46 cr. / Rs. - (3.12) cr. (FY22), and Rs. 37.00 cr. / Rs. - (6.89) cr. (FY23). Thus while its top line continued to decline, its earnings slipped in to red for the reported periods.
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 NSE WEBSITE DATA: SCRIP CODE: MARSHALL (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 59.40 on September 28, 2023, and opened on an ex-right basis at Rs. 58.45 on September 29, 2023. Since then, it has marked a high/low of Rs. 59.00 / Rs. 54.05. The scrip last closed at Rs. 55.00 as of October 06, 2023. For the last 52 weeks' it has posted a high/low of Rs. 63.16 / Rs. 21.14.
The promoters' holding has been at 52.01% as of June 30, 2023. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on October 7, 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 Marshall Machines 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 Marshall Machines Rights Issue 2023 worth investing. The Marshall Machines Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Marshall Machines Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Marshall Machines Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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