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Scanpoint Geo RI (BSE) review (Avoid)

Scanpoint Geomatics Limited Logo

•    SGL is a geospatial technology company providing GIS solutions.
•    This is the third right issue from the company since May 2019.
•    It has posted de-growth in its top and bottom lines from FY23 onwards.
•    Doubling equity post-RI may pose its servicing issue considering negligible profits.
•    There is no harm in skipping this "High Risk/Low Return" bet with low promoter's holding.

Scanpoint Geomatics Ltd. (SGL) is a geospatial technology company engaged in the business of developing a technology platform and solution in the field of Geographic Information System (GIS) and remote sensing. Its flagship technology IGiS is an indigenous software platform developed by it pursuant to contractual technical know-how arrangement of the Company with Indian Space Research Organization (ISRO).

IGiS is a unique technology which brings GIS, Image Processing, Photogrammetry, and 3D GIS together on a single platform. It helps solve complex geospatial data management to assist in meaningful, quick, effective, and efficient decision making. Its integrated technology platform and solutions enables the company to provide comprehensive geomatics solutions to clients. Backed on the domain knowledge and know-how provided by ISRO, SGL continues to innovate and enhance products and solutions in line with technological trends and market needs.

The Company has developed verticalized product and solution based on IGiS for segments which include agriculture, defense, land information, smart cities, urban planning, utilities, retail, and location-based services and caters to the specific business need of such respective segments using integrated GIS and remote sensing technology. The Company also provides end to end turn-key solutions in the area of enterprise GIS implementation which includes GIS platform, customized web and Mobile GIS application, implementation services, data modeling, training and capacity building and post implementation O & M services.

The Company is an ISO 9001:2015 certified company for providing geomatics solutions in the area of GIS, IP, CAD, LBS and surveys and its information security management system is ISO 27001:2013 certified. Its products and processes are compliant of OGC and CMMi3 quality and capability maturity standards. As of January 31, 2024, it had 151 employees on its payroll. 

The company is coming out with its Rights Issue (RI) of 69307248 equity shares of Rs. 2 each at a fixed price of Rs. 5 each to mobilize Rs.34.65 cr. The issue opens for subscription on February 28, 2024, and will close on March 07, 2024. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of February 19, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.50 cr. for this RI process, and from the net proceeds, it will utilize Rs. 20.00 cr. for repayment of unsecured loans in full or part. Rs. 10.00 cr. for working capital, and Rs. 4.15 cr. for general corporate purposes.

The issue is solely lead managed by Vivro Financial Services Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar of the issue. 

Post-RI, company's current paid-up equity capital of Rs. 13.86 cr. will stand enhanced to Rs. 27.72 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 69.31 cr.

On the financial performance front, for the last two fiscals, the company has posted a total income/net profit of Rs. 33.45 cr. / 1.96 cr. (FY22), Rs. Rs. 17.41 cr. / Rs. 0.58 cr. (FY23). For 3Qs of FY24 ended on December 31, 2023, it earned a net profit of Rs. 0.49 cr. on a total income of Rs. 10.64 cr. Thus it has posted degrowth in its top and bottom lines for FY23 onwards. 

The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects. 

The scrip last closed on cum-right basis at Rs. 7.00 on February 15, 2024, and opened on an ex-right basis at Rs. 6.00 on February 16, 2024. Since then, it has marked a high/low of Rs. 6.74 / Rs. 5.80. The scrip last closed at Rs. 6.08 as of February 26, 2024. For the last 52 weeks' it has posted a high/low of Rs. 9.95 / Rs. 5.00. The counter is currently under ESM: Stage 1.

The promoters' holding has been 18.62% for the last two quarters ended on December 31, 2023. The counter is well managed above the RI price to lure investors. 

Conclusion / Investment Strategy

This is the third rights issue from the company since May 2019. It has posted de-growth in its top and bottom lines from FY23 onwards. Based on its performance the issue appears aggressively priced. There is no harm in skipping this “High Risk/Low Return” bet.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on February 26, 2024

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 Scanpoint Geomatics Rights Issue 2024 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 Scanpoint Geomatics Rights Issue 2024 worth investing. The Scanpoint Geomatics Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Scanpoint Geomatics Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Scanpoint Geomatics Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.