Wardwizard Innovations RI review (May apply)

Wardwizard Innovations and Mobility Limited Logo

•    WIML is currently engaged in the EV two-wheelers and electronic appliances business.
•    For the last 21 months, it has posted growth in its top and bottom lines.
•    The counter is well operated on BSE with price being maintained above the RI price.
•    Based on its latest financial data, the issue is fully priced. 
•    Cash surplus/risk seeker investors may consider an investment with a long term perspective.

Wardwizard Innovations and Mobility Ltd. (WIML) (erstwhile known as Manvijay Development Co. Ltd.) is in the business to carry on the activities of Manufacturing Electric Vehicles, Spare Parts for Electric Vehicles and trade-in White Goods.

WIML prides itself in being an innovative company with a business segment of manufacturing electric vehicles and Smart technology-based electronic appliances. It entered the electric vehicle segment under the brand name "Joy E-Bikes" and products of electronic appliances are under the brand name "Vyom".

WIML has a state of the art manufacturing facility with a capacity to manufacture over 1 lakh E2W in a single shift. The plant is equipped to produce more than 4 lakhs units per year in full capacity in 3 shifts. The company's flagship brand Joy eBike has a huge product range with 9 different models. Its brand has a wide spread of more than 2000+ dealership/distributors touchpoints across Pan India. After Sales Service has been established at present dealership centres. It had 149 employees on its payroll as of September 30, 2021.

To part finance its needs for working capital (Rs. 36.90 cr.), general corporate purpose (Rs. 11.48 cr.), WIML is offering rights issue (RI) in the ratio of 1 share for every 43 shares held on the record date of January 22, 2022. The company is issuing 5962373 equity shares of Re. 1 each at a fixed price of Rs. 82 per share to mobilize Rs. 48.89 cr. The issue opens for subscription on February 07, 2022, and will close on February 21, 2022. Post allotment, shares will be listed on BSE. WINL is spending Rs. 0.51 cr. for this RI process. As of December 31, 2021, the promoter's holding was 71.64%. 

Applicants will have to pay Rs. 41 per share on application and the balance Rs. 41 on one or more subsequent calls as determined by the company. 

The issue is solely lead managed by Fedex Securities Pvt. Ltd. and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue. 

Post RI, WIML's current paid-up equity capital of Rs. 25.64 cr. will stand enhanced to Rs. 26.23 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 2151.22 cr. 

On the financial performance front, for the last two fiscals, WIML has (on a consolidated basis) posted turnover/net profits (loss) of Rs. 0.14 cr. / Rs. - (0.17) cr. (FY19), 0.21 cr. / Rs. - (0.92) cr. (FY20), and on a standalone basis, it has reported turnover/net profits of Rs. 39.36 cr. / Rs. 1.87 cr. (FY21). For the 3Qs of FY22 that ended on December 31, 2021, it has earned a net profit of Rs. 5.20 cr. on a turnover of Rs. 103.35 cr. Thus the company has been posting growth in its top and bottom lines for the last 21 months. 

WIML has paid a dividend of 5% for FY21. It will adopt a prudent dividend policy based on its financial performance and future prospects. 

The scrip last closed on cum-right basis at Rs. 94.15 on January 19, 2022, and opened on the ex-rights basis at Rs. 94.50 on January 20, 2022. Since then, it has posted a high/low of Rs. 96.80 / Rs. 81.55. It last closed at Rs. 95.70 (on February 04, 2022) and based on this closing, its market cap on post-RI stands at Rs. 2510.64 cr. It has posted last 52 weeks high/low of Rs. 100.70 / Rs. 58.97. 

This counter is well operated in the market and the price is maintained above the RI pricing since January 27, 2022.

Conclusion / Investment Strategy

Based on financial data, this RI is fully priced. Its counter is well operated with the trading price being maintained above the RI price since January 27, 2022. Though the e-bike segment is poised for bright prospects, many established players and new entrants will create a highly competitive business environment. Cash surplus/risk seeker investors may consider parking of funds with a long term perspective.

Review By Dilip Davda on Feb 4, 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 Wardwizard Innovations and Mobility Limited RI Views / Analysis / Recommendations ...

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