Tilak Ventures RI Oct. 24 review - (May apply)

•    This is the 2nd RI from the company since February 2022.
•    It originally started as a finance service company, opted to travel related business and again re-enter financial service business.
•    It posted growing financial performance with surge in bottom lines for FY23 and fY24.
•    The RI is at a discount of around 55% based on its last traded price.
•    Well-informed investors may park moderate funds for medium term. 

ABOUT COMPANY:
Tilak Ventures Ltd. (TVL) that was incorporated as Tilak Finance Ltd. decided to venture in to travel portal business in 2011-12, and changed its name to Out of City Travel Solutions Ltd. It again discarded its plans of travel related business and sold its portal in 2012, and renter finance related business. Following this it changed its name to current one.

The company is currently engaged in to trading of shares, commodities, loans and advances and investment activities. The offer document is silent on its employees' strength.

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 222848403 equity shares of Re. 1 each at a fixed price of Rs. 2.20 per share to mobilize Rs. 49.03 cr. The RI opens for subscription on October 03, 2024, and will close on October 11, 2024. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of September 13, 2024.The full amount is to be paid on application for number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.40 cr. for this RI process, and from the net proceeds, it will utilize Rs. 48.63 cr. for Working capital.

The issue is self-managed by the company and Link Intime India Pvt. Ltd. is the registrar to the issue. 

Post-RI, company's current paid-up equity capital of Rs. 22.28 cr. will stand enhanced to Rs. 44.57 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 98.05 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit/ -(loss) of Rs. 4.45 cr. / Rs. - (0.39) cr. (FY22) - on a standalone basis, and, Rs. 9.51 cr. / Rs. 2.27 cr. (FY23), and Rs. 16.91 cr. / Rs. 5.15 cr. (FY24) - on a consolidated basis. The sudden boost in its top and bottom lines for FY23 and FY24 raises eyebrows.  

DIVIDEND POLICY:
The offer document is silent on its dividend policy. 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: 503663 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 5.79 on September 12, 2024, and opened on an ex-right basis at Rs. 4.20 on September 13, 2024. Since then, it has marked high/low of Rs. 6.30 / Rs. 4.20. The scrip last closed at Rs. 4.84 as of September 27, 2024. For the last 52 weeks' it has posted a high/low of Rs. 6.54 / Rs. 2.73. The counter is currently under ESM: Stage 1.

The promoters' holding has declined to 52.98% for the last quarter ended on June 30, 2024, against 55.62% for quarter ended December 31, 2023. The counter is well managed and quoting above the RI price, to tempt investors.