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Tilak Ventures RI review (May apply)

Tilak Ventures Limited Logo

•    TVL, a primarily finance sector company kept changing its business line often. 
•    It has posted erratic financial performance and has not paid any dividends.
•    The counter is well operated despite being under ASM LT: Stage 1 at present. 
•    Risk seeker/ cash surplus investors may consider investing in this High Risk - Low Return bet.

ABOUT COMPANY: 
Tilak Ventures Ltd. (TVL) - (erstwhile known as Tilak Finance Ltd.), started its commercial operations in 1980 and since then it expanded and changed its line of business several times. In-between it ventured into the travel portal business, which was hived off and now this company is fully engaged in the business of financing, investments and trading into shares, commodities and bullion.  All segments are highly competitive. 

ISSUE DETAILS:
To part finance its needs for working capital (Rs. 38.93 cr.) and general corporate purpose (Rs. 8.73 cr.), TVL is coming out with a rights issue (RI) of 96360000 equity share of Re. 1 each at a fixed price of Rs. 5 per share to mobilize Rs. 48.18 cr. The issue opens for subscription on February 28, 2022, and will close on March 15, 2022. An amount of Rs.2.50 per share is to be paid on application and the rest on subsequent calls as determined by the company. The company is offering 3 RI for every 4 shares held on the record date of February 18, 2022. The company will be spending Rs. 0.52 cr. for this RI process. Post allotment, shares will be listed on BSE. 

The issue is solely lead managed by CapitalSquare Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. 

Post RI, TVL's current paid-up equity capital of Rs. 12.85 cr. will stand enhanced to Rs. 22.48 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 112.42 cr. 

FINANCIAL PERFORMANCE: 
On the financial performance front, for the last two fiscals, TVL has posted total income/net profits of Rs. 18.02 / Rs. 0.27 (FY20) and Rs. 5.11 cr. / Rs. 1.37 cr. (FY21). For the first half of FY22 ended on September 30, 2021, it has earned a net profit of Rs. 0.57 cr. on a total income of Rs. 0.63 cr. It has posted erratic performance for the reported periods. As of September 30, as well as of December 31, 20211, promoters' shareholding was 57.18%. against 59.93% as of June 30, 2021. This raises a bit of concern. 

As per unaudited results announced by the company, it has posted a loss of Rs. - (0.10) cr. on a total income of Rs. 0.84 cr. 

DIVIDEND POLICY:
The company has no dividend track record as per BSE Web. It will adopt a prudent dividend policy post this issue based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 503663
The scrip last closed on cum-right basis at Rs. 16.70 on February 16, 2022, and opened on the ex-rights basis at Rs. 11.60 on February 17, 2022. Since then, it has posted a high/low of Rs. 15.50 / Rs. 11.60. It last closed at Rs. 14.80 (on February 25, 2022) and based on this closing, its market cap on post-RI stands at Rs. 332.76 cr. It has posted the last 52 weeks high/low of Rs. 38.05 / Rs. 1.36. 

This counter is well operated in the market despite being under ASM LT Stage 1 at present.


Conclusion / Investment Strategy

The company’s counter is well maintained by vested interest parties and this RI appears lucratively priced against its current trading range. However, its current performance is listless and does not match the asking price. Hence, risk seekers/cash surplus investors may consider parking of funds in this “High Risk – Low Return” bet.

Review By Dilip Davda on Feb 25, 2022

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 information published here. Any reader taking decisions based on any information published here does so entirely at its 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.

(SEBI registered Research Analyst-Mumbai).


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.

Email: dilip_davda@rediffmail.com

More Tilak Ventures Limited RI Views / Analysis / Recommendations ...

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


1 Comments

1. Jeena Ram   I Like It. | Report Abuse |   Link | Mar 25, 2022 10:46:40 AM Reply
Sir RE share ka application tarika