Moksh Ornaments NSE RI review - (Apply)

•    The company is in the business of manufacturing and marketing of jewellery.
•    It largely does business on third party contract model basis.
•    It marked almost static top and bottom lines for FY23 and FY24.
•    Management is gearing to tap the benefit of fast changing style and fashion in small jewellery.
•    Based on its recent financial parameters, the issue appears fully priced. 
•    Investors may park funds for medium to long term.

ABOUT COMPANY:
Moksh Ornaments Ltd. (MOL) is in the business of manufacture and wholesale of jewellery and head quartered at Mumbai, Maharashtra. The jewelleries are manufactured on job work basis at Kolkata and Mumbai. It primarily sells gold jewellery and product profile includes bangles, chain, and mangalsutra. MOL’s focus is on developing new designs that meet customer’s requirements as well as cater to their tastes and specifications. 

The company gets products designed by third party designers. It endeavors to maintain the quality of products, follow strict procedures to ensure control quality, timely delivery and competitive prices. It offers regular designs and guarantee esteemed customers for the time bound delivery of the products. Its customers get the jewellery hallmarked from BIS recognized Assaying and Hallmarking Centre. The company only assists in dispatching the products to the Assaying and Hallmarking Centre for certification. The BIS hallmark, a mark of conformity widely accepted by the consumer bestows the additional confidence to the consumer on the purity of its gold jewellery.

It operates in a highly competitive market and there are large numbers of players in organized sector as well as in unorganized sector. Majority of the Indian jewellery industry consists of unorganized players who have historically dominated a large part of the market, although their share of the market has been falling and is expected to continue to decline. It also faces competition from organized jewellery companies who compete with it on a national, regional and local level. Thus it has multiple competitors at various regional and local levels across India. As of the date of this offer document, it had 10 employees on its payroll including 3 management person.

According to the management, while it continues to have formal trades with B2B segment, it is planning to tap B2C in domestic and overseas market to stay tuned with the ongoing trends of rising demand for small fashion/designer jewellery. It is also exploring its own office in Gulf to meet the rising demand in the region.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 32662642 equity shares of Rs. 2 each at a fixed price of Rs. 15 per share to mobilize Rs. 48.99 cr. The RI opens for subscription on December 30, 2024, and will close on January 10, 2025. The company is offering RI in the ratio of 14 for 23 to its eligible stakeholders as of the record date of December 20, 2024. Post allotment, shares will be listed on NSE. The company is spending Rs. 0.30 cr. for this RI process, and from the net proceeds, it will utilize Rs. 41.50 cr. for working capital, and Rs. 7.19 cr. for general corporate purposes. 

The RI is solely lead managed by Kunvarji Finstock Pvt. Ltd., and Bigshare Services Pvt. Ltd. is the registrar to the issue. 

Post-RI, company’s current paid-up capital of Rs. 10.73 cr. will stand enhanced to Rs. 17.27 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 129.48 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total income/net profit of Rs. 324.92 cr. / Rs. 5.05 cr. (FY22), Rs. 447.20 cr. / Rs. 6.26 cr. (FY23), Rs. 450.96 cr. / Rs 6.32 cr. (FY24). For Q1 of FY25 ended on June 30, 2024, it earned net profit of Rs. 2.24 cr. on a total income of Rs. 136.95 cr. 

DIVIDEND POLICY:
The company has paid a dividend of 5% for FY22 in the last three fiscals. 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: MOKSH (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 22.60 on December 19, 2024, and opened on an ex-right basis at Rs. 21.89 on December 20, 2024. Since then, it has marked a high/low of Rs. 23.00 / Rs. 18.22 The scrip last closed at Rs. 19.84 as of December 27, 2024. For the last 52 weeks’ it has posted a high/low of Rs. 26.06 / Rs. 11.95. 

The promoters’ holding has been constant at 55.13% for the last three quarters ended with Sept. 30, 2024, The counter is well managed above the RI price to lure investors.