Skipper Ltd. RI review - (May apply)

•    Skipper Ltd. is the Indian manufacturer of Transmission Monopoles structures.
•    It has global foot print and virtual monopoly in transmission tower related services.
•    The company has posted growth in its top and bottom lines for the reported periods.
•    The RI appears fully priced. Investors may park funds for the long term rewards.

ABOUT COMPANY:
Skipper Ltd. that was originally incorporated as Skipper Investments Ltd. in 1981 changed its name to Skipper Steels Ltd. in 1984 and pursuant to amalgamation of Bansal Cylinders & Tubes Ltd., Vishwajyothi Tracon Pvt. Ltd. and Skipper Infrastructure Ltd. with the company, its name was changed to Skipper Ltd. 

Currently, it is one of the manufacturing companies of Transmission Towers, Telecom Towers, Poles, Polymer Pipes & Fittings. Skipper differentiates its offerings with high quality and cost-effective solutions for infrastructure support. It is one of the Companies in India to manufacture monopoles and to successfully design and supply Transmission Monopoles structures to North America. Its international footprint spans across continents such as Latin America, Europe, and Africa and is spread across 55+ countries in the engineering segment. The Company has 42+ Years of proven excellence as India's integrated T&D company having its own Structure Rolling, manufacturing, Tower Load Testing Station and Transmission line EPC. 

Under the brand name of 'Skipper', the Company manufactures premium quality polymer pipes & fittings, which serves both the agricultural as well as plumbing products. The Company also commissioned a DSIR approved state of the art R&D Center and NABL accredited Tower Test Station in Village & P.O.- Barunda, P.S. Bagnan, District- Howrah, West Bengal, where Transmission structures of height 120M can be tested. The Company also launched several new products like Bath Accessories and Fittings and Water Storage Tanks called "Marina". Skipper Limited got its equity shares listed on BSE (Scrip Code: 538562) and NSE (Symbol: SKIPPER) in 2014 & 2015respectively.

The Company has three manufacturing facilities in the state of West Bengal and one in Assam. Skipper Limited prides on its quality and service; the ability to reach products across the country through its dealer distribution network; the ability to customize products as per specific sectoral and customer needs; the ability to graduate from mere product sale to turnkey tower installation solutions; & the ability to expand from manufacturing to service. 

The company exhibits a versatile business profile, evident through its three distinct divisions - engineering goods, polymer, and infrastructure, contributing 76%, 21%, and 3% respectively to its revenue of financial year 2022-23. Skipper is one of the pioneering companies for introducing and manufacturing Transmission Monopoles in India. It boasts a strong customer base, comprising renowned construction, power transmission, and distribution firms like Power Grid Corporation of India Limited, and UP Power Transmission Corporation Limited, among other.

Skipper has firmly established itself as among the three largest Transmission Tower manufacturing companies in India and among the 10 largest in the world. Skipper is the first choice for Tower supplies for all major EHV Transmission projects in India and is probably the only company in India to operate in all 3 verticals for Power Transmission - Angle Rolling, Tower production and EPC Line construction.

Skipper is one of the largest and the fastest-growing Polymer Pipes & Fittings manufacturer in India. Currently, it has 2,446 Employees and 55+ Countries where it exports products which solidifies its leadership position and leveraged expertise and manufacturing capabilities.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 10267021 equity shares of Re. 1 each at a fixed price of Rs. 194 per share to mobilize Rs. 199.18 cr. The issue opens for subscription on January 30, 2024, and will close on February 08, 2024. The company is offering RI in the ratio of 1 for 10 to eligible stakeholders as of the record date of January 12, 2024. The company is asking Rs. 48.50 (i.e. 25%) on application and the rest by way of one or more calls from time to time. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 1.10 cr. for this RI process and from the net proceeds, it will utilize Rs. 160.00 cr. for working capital, and Rs. 38.08 cr. for general corporate purposes.

The issue is solely lead managed by VC Corporate Advisors Pvt. Ltd. and Maheshwari Datamatics Pvt. Ltd., is the registrar of the issue. 

Post-RI, company's current paid-up equity capital of Rs. 10.27 cr. will stand enhanced to Rs. 11.29 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 2190.98 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 1711.10 cr. / Rs. 25.15 cr. (FY22), and Rs. 1985.62 cr. / Rs. 35.57 cr. As per unaudited reports filed with the exchanges, for H1 of FY24 ended on September 30, 2023, it earned a net profit of Rs. 36.04 cr. on a total income of Rs. 1330.29 cr. 

DIVIDEND POLICY:
The company has declared 10% dividends for the last four fiscals. 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: 538562 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 260.55 on January 11, 2024, and opened on an ex-right basis at Rs. 253.00 on January 12, 2024. Since then, it has marked a high/low of Rs. 273.00 / Rs. 215.05. The scrip last closed at Rs. 237.60 as of January 29, 2024. For the last 52 weeks' it has posted a high/low of Rs. 273.00 / Rs. 85.29. 

The promoters' holding has been constant at 71.89% for the last three quarters ended with December 31, 2023. The counter is well managed above the RI price to lure investors.