Courtesy: https://www.chittorgarh.com/
- The company is engaged in the business of social media marketing and management.
• It posted minuscule financial performance for FY23 and FY24 with erratic bottom lines.
• The issue appears aggressively priced considering its market price trends.
• The counter is witnessing discount price against the RI pricing, making it a farce of itself.
• Simply stay away from this pricey bet.
ABOUT COMPANY:
Laddu Gopal Online Services Ltd., (LGOSL) erstwhile known as ETT Ltd. (ETT), is engaged in the business of social media marketing and management, including but not limited to creating, managing, and optimizing social media accounts, developing and executing digital marketing strategies, content creation, social media advertising, influencer marketing, and audience engagement. To offer digital advertising services, including display advertising, video advertising, programmatic advertising, and media buying across social media platforms, websites, mobile applications, and other digital channels.
To provide consulting, training, and advisory services in the areas of digital marketing, social media strategy, online branding, content marketing, and analytics to businesses and individuals. To develop, design, and maintain digital products, tools, and platforms, including content management systems, customer relationship management systems (CRM), Email marketing tools, and marketing automation systems for online and digital marketing. To carry on the business of online brand management and reputation management by monitoring and managing the digital presence and public perception of brands, businesses, and individuals on the internet and social media platforms. To create, manage, and distribute online content in the form of blogs, videos, podcasts, infographics, and other multimedia for the purpose of digital marketing, brand promotion, and online engagement. As of March 31, 2024, it had just 8 employees on its payroll.
ISSUE DETAILS:
The company is coming out with Rights Issue (RI) of 16589856 equity shares of Rs. 10 each at a fixed price of Rs. 15 per shares to mobilize Rs. 24.89 cr. The RI is opening for subscription on February 21, 2025, and will close on March 05, 2025. The company is offering RI in the ratio of 8 for 5 to its eligible stakeholders as of the record date of February 11, 2025. The company is asking for full money on application for the number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.50 cr. for this RI process, and from the net proceeds, it will utilize Rs. 18.35 cr. for working capital, and Rs. 6.04 cr. for general corporate purposes.
The RI is self- managed by the company itself, and Beetal Financial & Computer Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company’s current paid-up equity capital of Rs. 10.37 cr. will stand enhanced to Rs. 26.96 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 40.44 cr. (Its capital structure table on page no. 39 of offer document has shown the quantum of RI as its post RI equity).
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total revenue/net profit of Rs. 2.80 cr. / Rs. 8.50 cr. (FY23), Rs. 2.74 cr. / Rs. 1.73 cr. (FY24). For H1 of FY25 ended on September 30, 2024, it posted a profit of Rs. 1.20 cr. on a total revenue of Rs. 1.59 cr. The financial statements for FY23 and FY24 on page no. 75 of the offer document has many mismatches raising confusion and needs clarification from the management.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy based on its financial performance and future prospects. However, the offer document is silent on its dividend policy.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 537707 (FV Rs. 10)
The scrip last closed on cum-right basis at Rs. 16.37on February 10, 2025, and opened on an ex-right basis at Rs. 16.00 on February 11, 2025. Since then, it has marked a high/low of Rs. 16.49 / Rs. 13.01. The scrip last closed at Rs. 14.08 as of February 20 2025. For the last 52 weeks’ it has posted a high/low of Rs. 36.80 / Rs. 13.01. The counter is currently under ESM: Stage 1.
The promoters’ holding has been declined to 0.10% for the last quarter ended with December 31, 2024 against 1.35% for previous two quarters ended with September 30, 2024. To a great surprise, the counter is trading at a discount to its RI offer price and has become a farce.
Conclusion / Investment Strategy
LGOSL is engaged in the business of social media marketing and management. It posted minuscule financial performance for FY23 and FY24 with erratic bottom lines. The issue appears aggressively priced considering its market price trends. The counter is witnessing discount price against the RI pricing, making it a farce of itself. Simply stay away from this pricey bet.
Review By Dilip Davda on February 20, 2025
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 the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their 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.
About Dilip Davda
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 detailed fundamental and financial analysis of companies coming up with IPOs 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
Courtesy: https://www.chittorgarh.com/
