PRICOL RIGHT ISSUE review - (May apply)

•    PRICOL is engaged in manufacturing of automotive components.
•    The company supplies its vided range products globally to OEMs.
•    It has discontinued and parted with the loss-making operations
•    Rights issue is offered at around 40% discount to last traded price (as on November 27, 2020)

ABOUT COMPANY:
PRICOL Ltd. (PRICOL) is one of the leading manufacturers of automotive components in India, catering primarily to automotive OEMs, both domestically and overseas. It manufactures a wide range of technology-intensive electronic and mechanical automotive products. These have applications across vehicle segments, including for two-wheelers, three-wheelers, four-wheeler passenger vehicles, light commercial vehicles, heavy commercial vehicles, and tractors. PRICOL also caters to the construction equipment segment in the global market.

Company's diversified product portfolio includes three major verticals i.e. Driver Information System, Pumps and Mechanical Products, Switches and Sensors.  It also manufactures and supplied wiper and wiper motors through its subsidiary. The company has seven manufacturing plants, five in India and two in Indonesia (owned and operated by its subsidiaries).

ISSUE DETAILS/CAPITAL STRUCTURE.
To part finance its need of working capital (Rs. 65.00 cr.) and general corpus funds (Rs. 14.27 cr.), PRICOL is coming out with a rights issue of 27084777 equity share of Re. 1 each at a fixed price of Rs. 30 per share to mobilize Rs.81.25 cr. The company is offering 2 shares against 7 shares held by the shareholders as on the record date of November 24, 2020. The issue opens for subscription on December 03, 2020, and will close on December 17, 2020. Post allotment, shares will be listed on BSE and NSE.

PRICOL is spending Rs. 1.98 for the entire issue process.

The issue is solely lead managed by Centrum Capital Ltd. while Integrated Registry Management Services Pvt. Ltd. is the registrar to the issue

Post issue, the company's current paid-up equity capital of Rs. 9.48 cr. will stand enhanced to Rs. 12.19 cr.

While based on its last traded price of Rs. 49.90, the market cap is Rs. 608, with the offer price; the company is looking at a market cap of Rs. 366 cr.

FINANCIAL PERFORMANCE:
In the month of July 2020, PRICOL discontinued some of its subsidiary business. This deal brought a profit of Rs. 25.67 cr. in Q2 of FY21. With the help of these gains, the company reported a net profit of Rs. 18.67 cr. for H1 of FY 21 on a turnover of Rs. 511.05 cr. For FY20 it reported a turnover of Rs. 1257.25 cr. with a loss of Rs. - (25.94) cr. on standalone and loss of Rs. - (98.75) cr. with working of discontinued subsidiaries.

On a consolidated basis, PRICOL posted turnover/net profit (loss) of Rs. 1826.27 cr. / Rs. - (93.74) cr. (FY19) and Rs. 1614. 68cr. / Rs. - (46.74) cr. (FY20) and bottom line stood at Rs. - (173.86) cr. and Rs. - (98.75) cr. respectively, with discontinued subsidiaries contributions.


SCRIP PRICE MOVEMENTS:
PRICOL LTD. (BSE CODE -540293) (NSE SYMBOL-PRICOLLTD), scrip closed at Rs. 60.00 on cum-right basis on November 23, 2020, and opened at Rs. 55.00 ex-right on November 24, 2020. Since going ex-right it moved between Rs. 55 - Rs. 47.20 between November 24 - November 27, 2020, and closed at Rs. 49.90 at the close of November 27, 2020 (as per BSE Website).