•    PTCI is in the manufacturing of products for defence, aerospace and other critical engineering services. 
•    It has a strong book value and good financial performance. 
•    This at par RI is termed as a “MINI BONUS”.
•    Eligible stakeholders should grab this opportunity.

ABOUT COMPANY:
PTC Industries Ltd. (PTCI) – erstwhile known as Precision Tools and Castings Ltd. – is in the business of manufacturing products for various critical applications for a wide spectrum of industries including Defence and Aerospace, Titanium and Exotic Metals Manufacturing, Oil & Gas, Liquefied Natural Gas (LNG), Ships & Marine, Valves and Flow control, Power plants and turbines and Pulp & Paper machinery. It offers a wide range of materials which include Titanium Alloys, Alloy Steel, Stainless Steel, Duplex and Super Duplex Stainless Steel, Creeps Resistant Steel, Heat Resistant Steel, Nickel- Based Alloys, Cobalt-Based Alloys, Austenitic Ductile Iron, Nickel Aluminium Bronze, etc.

However, the offer document is silent on its total employee strength.

ISSUE DETAILS: 
The company is coming out with a right issue (RI) of 7858594 equity shares of Rs. 10 each at par value to mobilize Rs. 7.86 cr. The issue opens for subscription on August 03, 2022, and will close on August 12, 2022. The company is offering RI in the ratio of 3 shares for every 2 shares held as of the record date i.e. July 22, 2022. It will utilize Rs. 5.89 cr. for investment in the wholly owned subsidiary Aerolloy Technologies Ltd. and Rs. 1.60 cr. for general corporate purposes. The issue is managed by the company itself and Link Intime India Pvt. Ltd. is the registrar to the issue. The full amount is to be paid on the application as per the entitlement plus additional shares applied for if any. Post allotment, shares will be listed on BSE. PTCI is spending Rs. 0.37 cr. for this RI process. This RI is done at around a 97% discount to its book value. Thus it can be termed a “Mini Bonus” for the existing eligible stakeholders

Post RI, PTCI’s current paid-up equity capital of Rs. 5.24 cr. will stand enhanced to Rs. 13.10 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 13.10 cr.

FINANCIAL PERFORMANCE: 
On the financial performance front, for the last two fiscals, PTCI has (on a consolidated basis) posted turnover/net profits of Rs. 168.55 cr. / Rs. 4.35 cr. (FY21) and Rs. 185.24 cr. / Rs. 12.81 cr. (FY22). However, on a quarterly basis, for the Q4 of FY22, it posted a decline in the top line but the bottom line improved in comparison with the previous corresponding period. As of March 31, 2022, its current paid-up equity capital of Rs. 5.24 cr. is supported by reserves of Rs. 168.28 cr. and its NAV stands at Rs. 315.38 per share.

DIVIDEND POLICY:
As per the offer documents it has not paid any dividend for the reported periods. It will adopt a prudent dividend policy based on its financial performance and future prospects.

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 539006:
The scrip last closed on cum-right basis at Rs. 4192.85 on July 20, 2022, and opened on an ex-right basis at Rs. 1670.00 on July 21, 2022. Since then it has marked a high/low of Rs. 1922.80 / Rs. 1762.00. The scrip last closed at Rs. 1802.90 as of August 02, 2022. Based on this quote, its post-RI market cap stands at Rs. 2361.38 cr. The scrip has posted last 52 weeks’ high/low of Rs. 2257.61 / Rs. 898.30. Promoters holding is at 67.80% for the last three quarters. The counter is well operated despite thin volumes.

Conclusion / Investment Strategy

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 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