Parvati Sweetners RI review - (May apply)

•    PSPL is in the business of manufacturing sugar and its by-products. 
•    Though it marked growth in its top lines, its bottom line marked inconsistency. 
•    Well-informed/cash surplus investors may consider investing in this at par offer with a long-term perspective. 

ABOUT COMPANY:
Parvati Sweetners and Power Ltd. (PSPL) is engaged in the business of manufacturing sugar and its by-products. It also has a captive power plant of 4MW. Its sugar mill has a crushing capacity of 2500 TCD and is located in Gwalior (MP). As of September 30, 2022, it had 38 full-time employees on its payroll and also had 321 seasonal contract labour. 

ISSUE DETAILS:
The company is coming out with a rights issue (RI) of 58963835 equity shares of Rs. 5 each at a par value to mobilize Rs. 29.48 cr. The company is offering RI in the ratio of 17 shares for every 26 shares held by the eligible stakeholders as of the record date of February 08, 2023. The issue opens for subscription on February 21, 2023, and will close on March 08, 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 BSE. The company is spending Rs. 0.45 cr. for this RI process and from the net proceeds, it will utilize Rs. 28.50 cr. for repayment of unsecured loans, and Rs. 0.53 cr. for general corporate purposes. 

PSPL itself is managing the issue and Purva Sharegistry (India) Pvt. Ltd. is the registrar of the issue. The registrar of the company is Link Intime India Pvt. Ltd. 

Post-RI, PSPL's current paid-up equity capital of Rs. 45.09 cr. will stand enhanced to Rs. 74.57 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 74.57 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a turnover/net profit of Rs. 50.25 cr. / Rs. 0.08 cr. (FY20), Rs. 58.83 cr. / Rs. 1.62 cr. (FY21) and Rs. 71.61 cr. / Rs. 1.09 cr. (FY22). For H1 of FY23, it earned a loss of Rs. - (3.03) cr. on a turnover of Rs. 57.40 cr. Thus it marked inconsistency in its bottom lines despite growth in its top lines. 

DIVIDEND POLICY:
The company has not declared any dividends for the last five years. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 541347 (FV Rs. 5).
The scrip last closed on cum-right basis at Rs. 9.78 on February 07, 2023, and opened on an ex-right basis at Rs. 8.45 on February 08, 2023. Since then, it has marked a high/low of Rs. 9.65 / Rs. 6.57. The scrip last closed at Rs. 6.57 as of February 17, 2023. For the last 52 weeks, it has posted a high/low of Rs. 12.48 / Rs. 6.57. The promoters' holding has been constant at 51.37% for the last three quarters ended on December 31, 2022. The counter is well managed above the par value to lure investors.