Vishvprabha RI review - (Avoid)

•    The company is engaged in realty development and constructions, which is highly competitive and fragmented segment. 
•    This is the 2nd RI from the company since December 2021.
•    It posted minuscule performance with negative earnings for the last two fiscals. 
•    The issue appears aggressively priced considering its losses.
•    There is no harm in skipping this "High Risk/Low Return" pricey bet. 

ABOUT COMPANY:
Vishvprabha Ventures Ltd. (VVL) is presently engaged as contractor and sub-contracting for various projects which includes construction of commercial and industrial structures. Its focus area is into Civil construction projects. 

Upon acquisition of control and entering into the business of real estate in year 2018, it has launched and planned a few projects and as on date of this Letter of Offer, it has completed one residential project at Thane and RCC/Brick to enable MEPF Services and associated Civil Works at Greenfield Airport at MOPA, North Goa.

The Company intends to exploit the opportunities that are available in the Real Estate / Infrastructure Sector and its operations will cover all aspects of real estate development, from the identification and acquisition of land, the planning, execution and marketing of projects etc. The Company also has plans for expansion of business through its Subsidiary Company which incorporated under the name style "Vishvprabha & VS Buildcon Private Limited. It is also exploring opportunities in Juice & Pulps market through our Subsidiary Company i.e., Vishvprabha Foods Private Limited. As of June 30, 2024, it had 12 employees on its payroll. It also hires contract labourers as and when required. 

ISSUE DETAILS:
The company is coming out with a 2nd Rights Issue (RI) of 1403182 equity shares of Rs. 10 each at a fixed price of Rs. 32 per share to mobilize Rs. 4.49 cr. Its last RI was in the month of December 2021. The RI opens for subscription on August 19, 2024, and will close on September 02, 2024. The company is offering RI in the ratio of 9 for 11 to its eligible stakeholders as of the record date of August 07, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.32 cr. for this RI process, and from the net proceeds, it will utilize Rs. 3.30 cr. for repayment/prepayment of unsecured loans, and Rs. 0.87 cr. for general corporate purposes. 

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

Post-RI, company's current paid-up equity capital of Rs. 1.72 cr. will stand enhanced to Rs. 3.12 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 9.98 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit/- (loss) of Rs. 1.88 cr. / Rs.  - (0.07) cr. (FY23), and Rs. 5.96 cr. / Rs. - (0.27) cr. (FY24. Thus while it posted minuscule top lines for the reported periods, it incurred losses. Considering the negative earnings, the issue is aggressively priced. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. 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: 512064 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 114.97 on August 06, 2024, and opened on an ex-right basis at Rs. 73.72 on August 07, 2024. Since then, it has marked a high/low of Rs. 73.72 / Rs. 54.21. The scrip last closed at Rs. 57.01 as of August 16, 2024. For the last 52 weeks' it has posted a high/low of Rs. 77.61 / Rs. 54.21. The counter is currently under GSM: Stage 0.

The promoters' holding has been constant at 60.67% for the last three quarters ended with June 30, 2024. The counter is well managed above the RI price to lure investors.