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Patel Integrated RI review (May apply)

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•    This is the second rights issue from the company after Feb/Mar 2021.
•    Previous issue too was at par but for Rs. 9.50 cr.
•    This time the issue size is above four times of previous RI.
•    Cash surplus/risk seekers may invest in this at par offer for the long term. 

Patel Integrated Logistics Ltd. (PILL) is engaged in the business of providing logistics services and unified solutions focusing on air transportation and surface transportation as well as ancillary services such as courier services and warehousing. The company operates through a Pan-India network comprising 24 branch offices and presence across India covering major cities/towns/airports. This is the second rights issue (RI) from the company within a year. Its last RI was in the month of February/March 2021 for raising Rs. 9.50 cr. This RI is over four times the previous RI. 

To part finance its plans for repayment/prepayment of borrowings with interest (Rs. 35 cr.) and general corporate purpose (Rs. 4.40 cr.), PILL is coming out with its RI of 40000000 equity shares of Rs. 10 each at par to mobilize Rs. 40 cr. The issue has already opened for subscription on November 09, 2021, and will close on November 23, 2021. Post allotment, shares will be listed on BSE and NSE. Applicants have to pay Rs. 2.50 per share on application and balance Rs. 7.50 on-call by the company. The company is spending Rs. 0.60 cr. for this rights issue process. 

The company is issuing 613 shares for every 399 shares held as of the record date of October 29, 2021. 

The issue has no merchant banker but is being managed by the company itself and Bigshare Services Pvt. Ltd. is the registrar to the issue. 

Post RI, PILL's current paid-up equity capital of Rs. 26.04 cr. will stand enhanced to Rs. 66.04 cr. (66035923 shares). Based on the RI pricing, the company is looking for a market cap of Rs. 66.04 cr. 

On the financial performance front, for the last two years, the company has posted turnover/net profits of Rs. 353.87 cr. / Rs. 10.74 cr. (FY20) and Rs. 217.30 cr. / Rs. 0.05 cr. (FY21). It suffered a severe setback in the pandemic year in its performance for FY21. As per unaudited results, for Q1 of FY22 ended on June 30, 2021, it has reported a loss of Rs. - (0.81) cr. on a turnover of Rs. 51.76 cr. 

The company is expected to improve upon as the normalcy restores at all levels going forward. As of June 30, 2021, its current equity capital of Rs. 26.04 cr. is supported by free reserves of Rs. 90.48 cr. Post this issue its reserves will stand almost the same while paid-up equity capital will stand enhanced to Rs. 66.04 cr. Its debt-equity ratio as of said date was 0.44 and will stand reduced to 0.33 post-RI issue. 

SCRIP PERFORMANCE: (As per BSE website) (Scrip code: 526381)
PILL closed cum-rights at Rs. 27.65 on October 27, 2021, and opened ex-right at Rs. 15.30 on October 28, 2021. Since then it has posted a high/low of Rs. 17.45 / Rs. 14.70 and last closed at Rs. 14.95 per share on November 09, 2021. Based on its last traded price, the market cap on post RI amounts to Rs. 98.72 cr. The scrip has marked the last 52 weeks' high/low of Rs. 19.65. / Rs. 9.63. 

Conclusion / Investment Strategy

Surprisingly this company is coming out with its second rights issue within a year. Previous RI too was at par value. Though the company is raising more funds to repay debt, its many-fold hike in equity capital raises concern. Hence, risk seekers/cash surplus investors may consider long term investment in this at par RI.

Review By Dilip Davda on November 9, 2021

Review Author

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, a freelance journalist

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: ).

The Patel Integrated Rights Issue 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 Patel Integrated Rights Issue worth investing. The Patel Integrated Rights Issue Note sets the Rights Issue expectations in systematic way which tells you if Patel Integrated Rights Issue good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Patel Integrated Rights Issue by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.