Sonalis Consumer BSE RI review - (Avoid)

•    The company is engaged in the business of trading/manufacturing of organic/inorganic food products, warehousing services etc.
•    After dismal performances for FY23 and FY24, it marked super growth in pre-RI period to fetch the greedy valuations.
•    The counter is well operated above the RI price by vested interest quarters. 
•    This issue at a marginal discount with irregular and low volume is a “High Risk/Low Return” bet.
•    Nearly one and half fold increase in its paid-up equity post RI may face its servicing issue, Investors may skip this pricey RI.

PREFACE:
SCPL came with its maiden SME IPO in the month of June 2023 for mobilizing Rs. 2.83 cr. at a price of Rs. 30.00 per share. The company is self-managing the RI and has priced it greedily. For maiden IPO, it spent Rs. 0.38 cr. and now for this RI it is spending Rs. 0.13 cr. The IPO was lead-managed by Expert Global Consultants Pvt. Ltd., but this RI is self-managed by the company under relaxed norms for RI. The offer document is dated April 01, 2025 and was made available on the designated exchange post this noon (i.e., April 09, 2025).

ABOUT COMPANY:
Sonalis Consumer Products Ltd. (SCPL) is engaged in the business of trading, processing, farming, manufacturing, distributing all kinds of organic and inorganic food products and other consumable provisions. It is also providing warehousing and related services. Currently it has two products i.e., Chakli and Laddu. As of March 31, 2024, it had just 9 employees on its payroll.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 2998500 equity shares of Rs. 10 each at a fixed price of Rs. 54.60 per share to mobilize Rs. 16.37 cr. The RI opens for subscription on April 11, 2025, and will close on April 25, 2025. The company is offering RI in the ratio of 3 for 2 to its eligible stakeholders as of the record date of March 28, 2025. The company is asking full money on application for the number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.13 cr. for this RI process, and from the net proceeds, it will utilize Rs. 6.91 cr. for working capital, Rs. 3.41 cr. for capex on building construction, Rs. 3.93 cr. for capex on equipment/machineries, and Rs. 2.00 cr. for general corporate purposes.

The RI is self-managed by the company and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue. 

Post-RI, company’s current paid-up equity capital of Rs. 2.00 cr. will stand enhanced to Rs. 5.00 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 27.29 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total revenue/net profit of Rs. 6.53 cr. / Rs. 0.003 cr. (FY23), and Rs. 4.11 cr. / Rs. 0.02 cr. (FY24). For H1 of FY25 ended on September 30, 2024. It earned a net profit of Rs. 0.18 cr. on a total revenue of Rs. 45.91 cr. The sudden boost in top and bottom lines ahead of RI appears to be cooked data. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has already adopted a dividend policy, based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 543924 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 56.30 on March 27, 2025, and opened on an ex-right basis at Rs. 54.19 on March 28, 2025. Since then, it has marked a high/low of Rs. 58.13 / Rs. 54.19. The scrip last closed at Rs. 58.13 as of April 09, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 97.95 / Rs. 36.38. The counter is currently under ESM: Stage 2 with a 2% circuit filter limits.

The promoters’ holding has marginally increased to 39.69% for the half year ended with March 31, 2025, against 38.59% for previous two half years ended at September 30, 2024. The counter is well managed above the par value by vested interest to tempt investors.