Roni Households BSE SME RI review - (Avoid)

•    RHL is involved in Agri commodity trading and plastic household manufacturing activities.
•    It has posted inconsistency in its bottom lines for the reported periods. 
•    The counter is well operated with vested interest parties despite thin volumes.
•    Considering its financial data, this RI is aggressively priced. 
•    There is no harm in skipping it. 

PREFACE:
RHL came with its maiden IPO at a fixed price of Rs. 20 per share in November 2018 and still continues to be on the SME platform. With minuscule financial performance, the counter was well operated with thin volumes by vested interest. This right issue also comes with aggressive pricing.  

ABOUT COMPANY:
Roni Households Ltd. (RHL) is currently in the business of Trading Agricultural Commodities and Manufacturing plastic household products which majorly involves kitchenware and bath ware products and other household products etc. The Company is even engaged in trading Agricultural Commodities. 

RHL's revenue mix is 4.95% from manufacturing activities and the rest from trading activities. As of July 31, 2022, it has 8 employees on its payroll. 

ISSUE DETAILS:
To part finance its needs for adjustment of unsecured loans from the promoters (Rs. 3.63 cr.), repayment of the loan from SBI (Rs. 0.50 cr.), working capital (Rs. 1.03 cr.), and general corporate purposes (Rs. 0.75 cr.), RHL is offering rights issue (RI) of 867189 equity shares of Rs. 10 each at a fixed price of Rs. 70 per share to mobilize Rs. 6.07 cr. It is offering RI in the ratio of 1 share for every 5 shares held as of the record date of November 25, 2022, to the eligible shareholders. The issue opens for subscription on December 09, 2022, and will close on December 23, 2022. The full amount is to be paid along with the application. Post allotment, shares will be listed on BSE SME. RHL is spending Rs. 0.16 cr. for this RI process. The market lot for this RI will be 300 shares. 

Aryaman Financial Services Ltd. is the sole lead manager for this issue and Bigshare Services Pvt. Ltd. is the registrar of the issue.

Post-RI, RHL's current paid-up equity capital of Rs. 4.34 cr. will stand enhanced to Rs. 5.20 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 36.42 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, RHL has posted a turnover/net profit - (loss) of Rs. 10.69 cr. / Rs. 0.16 cr. (FY21), and Rs. 10.76 cr. / Rs. - (1.26) cr. (FY22). For the H1 of FY23 ended on September 30, 2022, it earned a net profit of Rs. 0.12 cr. on a turnover of Rs. 2.23 cr.  Thus it has posted inconsistency in its bottom lines. 

DIVIDEND POLICY:
RHL has no track record of any dividend payouts. It will adopt a prudent dividend policy post-listing of RI, based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 542145 (FV Re. 10).
The scrip closed at Rs. 104.00 on cum-right basis as of November 22, 2022, and thereafter it has not marked any trading on BSE Exchange. Thus it has no data for a high/low post-turning ex-right. It last closed at Rs. 104.00 as of November 22, 2022. The scrip has posted the last 52 weeks' high/low of Rs. 130.00 / Rs. 90.00 with planned operations on a thin volume. The promoter's holding has been constant at 59.66% for the last three quarters ended on September 30, 2022.