– By Dilip Davda
- This is the 2nd RI from the company since December 2021.
- The company is engaged in the manufacturing of prevision engineering components with prime focus on automotive sector.
- It has posted declining trends for its top lines and incurring losses for all reported periods.
- Based on its recent average financial data, the issue appears exorbitantly priced.
- Investors may keep away from this pricey and dicey – High risk/Low Return RI.
ABOUT COMPANY:
Shivam Autotech Ltd., (SAL) is engaged in the manufacturing of precision engineering components, requiring raw materials which are metals and commodities in nature. The company has historically derived majority of its revenues from the domestic market. It is majorly dependent on domestic sales while its products are also sold in USA, Germany, Mexico, Spain, Liechtenstein and Hungary. Thus, the sales of the Company are widely dispersed throughout the domestic and any failure to maintain such dispersion may impact sales, revenues, and consequently, the financial performance of the Company.
The ongoing geopolitical conflicts and war-related disruptions have resulted in an increase in the cost of petroleum-based consumables used in its manufacturing operations. It is currently in discussions with customers regarding the pass-through of such increased costs through appropriate commercial arrangements. However, there can be no assurance that it will be able to fully or timely pass on such increased costs to customers, or at all. Any inability or delay in recovering such increased costs may adversely affect its operating margins, profitability, cash flows and results of operations.
Further, any escalation or prolongation of geopolitical conflicts, including war, may lead to further increases in the prices of petroleum-based consumables and other raw materials, disruptions in global supply chains, volatility in commodity prices, trade restrictions or broader macroeconomic uncertainties. If such developments occur and the company is unable to mitigate their impact or recover the increased costs from customers, its business, financial condition, results of operations and cash flows could be materially and adversely affected.
Any economic downturn or adverse changes within this market could significantly impact on its sales performance. Consequently, fluctuations in the domestic economy pose a considerable risk to financial stability and growth prospects. Furthermore, changes in consumer preferences, increased competition, or regulatory shifts within the domestic market can also adversely affect its sales. SAL’s heavy dependence on this single market means that it is particularly vulnerable to its economic conditions. In order to mitigate such risks, the Company is proposing to expand its product portfolio by entering the aluminium forging segment. It has developed aluminium forging products in response to customer requirements and evolving market demand and intend to commence their commercial manufacture to expand its presence in the automotive components sector in the current Fiscal. However, there can be no assurance that it will be able to successfully commercialize such products, achieve the anticipated demand or realize the expected benefits from such expansion within the expected timelines, or at all. As of June 30, 2026, it had 753employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 100000000 equity shares of Rs. 2 each at a fixed price of Rs. 12 per share to mobilize Rs. 120.00 cr. This is the 2nd RI from the company since December 2021. The RI opens for subscription on October 28, 2026, and will close on November 14, 2026. The company is offering RI in the ratio of 19 for 25 to its eligible stakeholders as of the record date of October 15, 2026. The company is asking for full money on application for number of shares applied. Post allotment, RI shares will be listed on BSE and NSE. The company is spending Rs. 0.25 cr. for this RI process, from the net proceeds, Rs. 75.00 cr. for adjustment of unsecured loans from promoters, Rs. 32.00 cr. for working capital, Rs. 12.75 cr. for general corporate purposes.
The RI is solely lead managed by the company itself, and MCS Share Transfer Agent Ltd. is the registrar to the issue.
Post-RI, company’s current paid-up equity capital of Rs. 34.63 cr. (173147423 equity shares) will stand enhanced to Rs. 46.30 cr. (231495219 shares). Based on the RI pricing, the company is looking for a market cap of Rs. 277.79 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total revenue / net profit / – (loss), of Rs. 453.98 cr. / Rs. – (48.04) cr. (FY25), Rs. 409.58 cr. / Rs. – (81.33) cr. (FY26). For Q1-FY27 ended on June 30, 2026, it posted loss of Rs. 20.99 cr. on a total revenue of Rs. 109.58 cr. The company has been incurring losses for the reported periods. Its NAV stood at Rs. – (4.69) per share against FV of Rs. 2 per share.
DIVIDEND POLICY:
The company has not paid any dividends for the last three years. It will adopt a prudent dividend policy, based on its financial performance and future prospects. The offer document is silent on its dividend policy.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 532776 (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 19.42 on October 14, 2026, and opened on an ex-right basis at Rs. 17.00 on October 15, 2026. Since then, it has marked a high/low of Rs. 17.98 / Rs. 13.65. The scrip last traded at Rs. 14.28 as of October 26, 2026. For the last 52 weeks’ it has posted a high/low of Rs. 25.63 / Rs. 11.01. The counter is currently under ASM LT: Stage 1.
The promoters’ holding has been at 69.52% for the last quarter ended on Sept. 30, 2026. The counter is trading little above its RI price with operations from vested interests.
CONCLUSION:
This is the 2nd RI from the company since December 2021. SAL is engaged in the manufacturing of precision engineering components with prime focus on automotive sector. It has posted declining trends for its top lines and incurring losses for all reported periods. Its NAV stood at Rs. – (4.69) per share against its FV of Rs. 2. Based on its recent average financial data, the issue appears exorbitantly priced. Investors may keep away from this pricey and dicey – High risk/Low Return RI.
Review By Dilip Davda on August, 2026
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. 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 ).
