Murae Organisor Dec. 24 BSE RI review - (Avoid)

•    The company is engaged in the marketing, trading and distribution of pharma products.
•    This is the 2nd RI from the company since April 2023.
•    It has posted dismal financial performance for the reported periods. 
•    Hike in equity to the level of Rs. 185.90 cr. may pose its servicing issue. 
•    There is no promoter holding in this company.
•    Though this RI is at par value, there is no harm in skipping it. It’s a “High Risk/No Return” bet.

ABOUT COMPANY:
Murae Organisor Ltd. (MOL) erstwhile known as Earum Pharmaceuticals Ltd., is engaged in pharmaceutical business involving marketing, trading and distribution of wide range of pharmaceutical formulation products such as anti-biotic drugs, anti-malarial drugs, anti-allergic & anti cold drugs, analgesic/ anti-pyretic & anti-inflammatory drugs, dermatology products, cerebral activator drugs, neurological drugs, gastro intestinal drugs, steroids, gynecology drugs, calcium, multivitamins, anti-oxidants and injections.

The Company remained focused on providing distinctive, high quality and trusted products to consumers at right price. It is an Entrepreneur driven and well managed organization focused on meeting consumer requirements for meeting their fashion and lifestyle requirements by offering products and services with the finest quality. The offer document is silent on its employees’ strength. 

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 232370539 equity shares of Rs. 2 each at par value to mobilize Rs. 46.47 cr. The RI opens for subscription on December 30, 2024, and will close on January 13, 2025. The full amount it to be paid on application for number of shares applied.  The company is offering RI in the ratio of 1 for 3 to its eligible stakeholders as of the record date of December 19, 2024. Post allotment, shares will be listed on BSE. The company is spending Rs. 1.50 cr. for this RI process, and from the net proceeds, it will utilize Rs. 36.00 cr. for working capital, and Rs. 8.97 cr. for general corporate purposes. This is the 2nd RI from the company since April 2023.

The RI is self-managed by the company itself, and Bigshare Services Pvt. Ltd. is the registrar to the issue. 

Post-RI, company’s current paid-up capital of Rs. 139.42 cr. will stand enhanced to Rs. 185.90 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 185.90 cr. (The offer document has erred in post-RI paid-up equity data on page no. 39)

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total income/net profit of Rs. 16.36 cr. / Rs. 1.98 cr. (FY23), Rs. 4.06 cr. / Rs 0.05 cr. (FY24), For Q1 of FY25 ended on June 30, 2024, it posted net profit of Rs. 0.77 cr. on a total income of Rs. 11.24 cr. 

DIVIDEND POLICY:
The company has not declared any dividends for the referred periods of the offer document. It has adopted a dividend policy in 2015, based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 542724 (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 2.20 on December 18, 2024, and opened on an ex-right basis at Rs. 2.19 on December 19, 2024. Since then, it has marked a high/low of Rs. 2.40 / Rs. 1.95. The scrip last closed at Rs. 2.03 as of December 27, 2024. For the last 52 weeks’ it has posted a high/low of Rs. 3.03 / Rs. 1.04. The counter is currently under ESM: Stage 1. 

The promoters’ holding has been constant at 00% for the last three quarters ended with Sept. 30, 2024. The counter is well managed above the RI price by vested interests to temp investors.