• The company that was originally engaged in manufacturing of cold and hot rolled stainless steel sheets etc, is now entering in to chemicals.
• Though it posted growth in its top lines from FY22 to FY24, its bottom line marked inconsistency.
• It is currently trading below its RI price and is a major alarm.
• Minuscule earnings may pose its post-RI equity servicing issues.
• Simply stay away from this pricey “High Risk/No Return” bet.
PREFACE:
The company is coming out with its RI to mobilize Rs. 34.33 cr., and is opening for subscription on June 05, 2025, and its offer document is dated April 24, 2025, with a record date was of May 16, 2025, but the offer document was not uploaded on the designated exchange till 11.30 am of June 04, 2025 noon. Thus, delayed submission of offer documents for RI is unabatedly going on.
ABOUT COMPANY:
Unison Metals Ltd. (UML) was Initially engaged in manufacturing of cold and hot rolled stainless steel sheets, manufacturing of stainless steel and non-stick cookware, kitchenware and serve ware. In the year 2018-19, the company diversified its operations by launching a chemical division, focusing on the production of chemical compounds such as sodium silicate, frit engobe, and other specialty products.
At present, its product portfolio includes stainless steel cold rolled sheet/flats, sodium silicate glass, and frit engobe.
UML is the single point solution for the market for its one-touch access with wide ranging products,
systems and solutions. The company is having facilities of manufacturing; marketing of goods coupled
with constant technological innovations, customer focus and integrated approach. The offer document is silent on its employees’ strength.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 13732286 equity shares of Rs. 10 each at a fixed price of Rs. 25 per share to mobilize Rs. 34.33 cr. The RI is opening for subscription on June 05, 2025, and will close on June 16, 2025. The company is offering RI in the ratio of 6 for 7 to its eligible stakeholders as of the record date of May 16, 2025. The company is asking for full money on application for number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.28 cr. for this RI process, and from the net proceeds, it will utilize Rs. 5.00 cr. for purchase of land, Rs. 17.75 cr. for repayment of loan, Rs. 7.00 cr. for purchase of plant and machinery, Rs. 4.00 cr. for working capital, and Rs. 0.30 cr. for general corporate purposes.
The RI is self-managed by the company itself, and MUFG Intime India Pvt. Ltd. is the registrar to the issue.
Post RI, company’s current paid-up equity capital of Rs. 16.02 cr. will stand enhanced to Rs. 29.75 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 74.38 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, it has posted a total revenue/ net profit/ - (loss) of Rs. 94.18 cr. / Rs. 1.00 cr. (FY22), Rs. 111.25 cr. / Rs. 0.62 cr. (FY23), Rs. 150.05 cr. / Rs. 0.94 cr. (FY24). For H1 of FY25 ended on September 30, 2024, it earned a net profit of Rs. 0.60 cr. on a total income of Rs. 56.87 cr. company is going with the RI offer with its last financial data as of September 30, 2024 and is a big surprise. It is also diversifying into chemical business from the routine metal related business.
DIVIDEND POLICY:
The company has not declared any dividends for the last five 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: 538610 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 24.23 on May 15, 2025, and opened on an ex-right basis at Rs. 24.50 on May 16, 2025. Since then, it has marked a high/low of Rs. 25.55 / Rs. 23.10. The scrip last closed at Rs. 23.8 as of June 03, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 36.8 / Rs. 20.62.
The promoters’ holding has been constant around 51.61% for the last two quarters ended with March 31, 2025. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on June 4, 2025
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
