Vistar Amar RI review - (Avoid)

•    The company manufactures and supplies fish meal powder, an essential ingredient for aqua feeds.
•    It marked average financial performance with almost static bottom line.
•    For Q1 of FY25 the company marked lower topline and reported a minuscule loss.
•    The RI appears aggressively priced based on its financial data and the market performance in recent times.
•    There is no harm in skipping this "High Risk/Low Return" pricey bet.

PREFACE:
For this RI, the offer documents were made available on BSE only on December 12, 2024, morning, while the offer document is dated December 02, 2024. The delay in uploading the offer documents on designated exchanges is turning worrisome now a day. Can regulators or concern authorities throw some light on this?? What is more, this offer documents has financial data in two sets, i.e. in Rs. thousands, and in Rs. lakhs. This also leads to some confusion.

ABOUT COMPANY:
Vistar Amar Ltd. (VAL) was originally incorporated as "Shubra Leasing Finance and Investment Company Limited" as a Public Limited Company under the Companies Act, 1956 pursuant to a Certificate of Incorporation granted by the Registrar of Companies, New Delhi in 1983. The name of the Company was changed to Vistar Amar Limited vide a fresh Certificate of Incorporation in 2016 issued by the Registrar of Companies, Maharashtra, Mumbai.

Thereafter, the registered office of the company was shifted from the State of Maharashtra to the State of Gujarat in 2024. Currently it is engaged in processing of fish and fish related activities. It is in the business of making sterilized fishmeal derived from fish or fish wastes using a fully mechanized process. The fishmeal has protein content ranging from 30% to 50% and is in high demand in poultry farms as feed and in the agriculture industry as manure. Fish by-products have been used historically to feed poultry, pigs and other farmed fish. 

The company manufactures and supplies fish meal powder which is an essential ingredient in the manufacturing of aqua feed (for fish and shrimp) and poultry feed (for broiler and layer) and pet food (dog and cat food). It sells products domestically. As of March 31,2024, it had 10 full time employees on its payroll. The company is operating in a highly competitive and fragmented segment.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 2560000 equity shares of Rs. 10 each at a fixed price of Rs. 117 per share to mobilize Rs. 29.95 cr. The RI opens for subscription on December 13, 2024, and will close on December 20, 2024. The full amount is to be paid on application for number of shares applied. The company is offering RI in the ratio of 4 for 5 to its eligible stakeholders as of the record date of December 06, 2024. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.69 cr. for this RI process, and from the net proceeds, it will utilize Rs. 15.50 cr. for acquiring group company i.e. Amar Sterilized Fish Meal, Rs. 5.37 cr. for setting up a new unit at Mangrol, Rs. 6.00 cr. for working capital, and Rs. 2.39 cr. for general corporate purposes. 

The RI is solely lead managed by Mark Corporate Advisors Pvt. Ltd., and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue. 

Post-RI, company's current paid-up capital of Rs. 3.20 cr. will stand enhanced to Rs. 5.76 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 67.39 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total income/net profit/ of Rs. 64.18 cr. / Rs. 3.17 cr. (FY23), Rs. 74.11 cr. / Rs 3.71 cr. (FY24), For Q1 of FY25 ended on June 30, 2024, it marked a loss of Rs. 0.02 cr. on a total income of Rs. 11.41 cr. Surprisingly the company has given its financial data in Rs. thousand (for FY23 and FY24), and in Rs. Lakhs (For Q1 of FY25), that leads to confusion. Why such double standards are followed and how regulators are approving such documents?

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: 538565 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 170.10 on December 05, 2024, and opened on an ex-right basis at Rs. 140.10 on December 06, 2024. Since then, it has marked a high/low of Rs. 146.00 / Rs. 133.00. The scrip last closed at Rs. 135.45as of December 12, 2024. For the last 52 weeks' it has posted a high/low of Rs. 241.08 / Rs. 106.76. 

The promoters' holding has been constant at 65.65% for the last three quarters ended with Sept. 30, 2024. The counter is well managed above the RI by vested interests to lure investors.