Courtesy: https://www.chittorgarh.com/
Review By Dilip Davda on October 21, 2025
- The company that was primarily in the business of trading in edible oils and other products has ventured into liquor bottling.
• While the company marked degrowth in its top lines for the last two fiscals, is managed to increase its margins.
• For Q1 of FY26 it posted losses, that raises concern.
• This RI is aggressively priced even though its at a discount of around 24%.
• There is no harm in skipping this pricey and dicey “High Risk/Low Return” Bet.
ABOUT COMPANY:
Suraj Industries Ltd. (SIL) was engaged in the business of (i) trading in edible oils and other products, which consist of Palm Oil, Soybean Oil, Rice flakes, Malt & Empty Glass bottles and (ii) bottling and packaging of Alcoholic Beverages.
The Company has recently discontinued its trading operations in edible oils, including Palm, Soyabean and other related products, and has shifted its focus towards the liquor business. While the change in operations has led to revenue growth, it has also resulted in increased losses in the short term. There may be a possibility that the Company may not achieve profitability in the near future and that there may not be consistent returns. Further, any delay or inability to stabilize operations under the liquor business may adversely affect the Company’s financial performance and, consequently, the value of its equity shares.
The company has made significant investments in its material subsidiary, Carya Chemicals & Fertilizers Private Limited (“Carya”), and propose to utilize a portion of the Net Proceeds from this Issue towards meeting the fixed capital requirements of its distillery unit. While Carya has recently commenced operations at its bottling plant with a capacity of 48 lakh cases per annum, its distillery unit with a proposed capacity of 125 KL per day is still under implementation and scheduled for commissioning in April 2026. As of June 30, 2025, the Company employed a work force of 22 full-time employees. It also hires contract worker as and when needed.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 29925394 equity shares of Re. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 119.70 cr. The RI opens for subscription on October 23, 2025, and will close on November 07, 2025. The company is offering RI in the ratio of 21 for 13 to its eligible stakeholders as of the record date of October 13, 2025. The company is asking for Rs. 10 per share on application for the number of shares applied. The rest it to be payable by one or more subsequent calls as per determination of the company from time to time. Post allotment, RI shares will be listed on BSE. The company is spending Rs. 0.45 cr. for this RI process, and from the net proceeds, it will utilize Rs. 47.32 cr. for investment in subsidiary Carya chemicals and Fertilizers Pvt. Ltd. for capital requirement of its distillery unit, Rs. 14.99 cr. for capex on setting up of manufacturing unit of corrugated boxes and PET bottles., and Rs. 7.20 cr. repayment/prepayment of certain loans, Rs. 8.04 cr. for acquisition of additional equity shares of Carya Chemicals, Rs. 41.70 cr. for funding unidentified acquisitions and investment coupled with general corporate purposes.
The RI is self-managed by the company itself, and Beetal Financial and Computer Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company’s current paid-up equity capital of Rs. 18.53 cr. will stand enhanced to Rs. 48.45 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 193.80 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted total income / net profit, of Rs. 52.18 cr. / Rs. 4.44 cr. (FY24), and Rs. 31.29 cr. / Rs. 4.02 cr. (FY25). For Q1 of FY26 ended on June 30, 2025, it marked a net loss of Rs. – (1.27) cr. on a total income of Rs. 14.45 cr. For FY25, while its top line marked degrowth, its bottom line posted higher margins, but for Q1 of FY26, it posted loss on higher top line compared to corresponding previous period.
Its NAV stood at Rs. 55.02 as of June 30, 2025, against Rs. 63.24 as of March 31, 2025.
DIVIDEND POLICY:
The company has not paid any dividends for the reported periods. It will adopt a prudent dividend policy, based on its financial performance and future prospects. However, offer document is silent on its dividend policy.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 526211 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 88.72 on October 10, 2025, and opened on an ex-right basis at Rs. 55.00 on October 13, 2025. Since then, it has marked a high/low of Rs. 60.00 / Rs. 50.56. The scrip last closed at Rs. 52.93 as of October 20, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 60.15 / Rs. 36.32. This is the 2nd RI from the company since July 2024.
The promoters’ holding has been constant at 39.35% for the last three quarters ended with September 30, 2025. RI is at a discount of around 24.42% based on its last traded price of Rs. 52.93 as of October 20, 2025. The counter is well maintained above the RI price to tempt investors.
Conclusion / Investment Strategy
SIL that was primarily in the business of trading in edible oils and other products has ventured into liquor bottling. While the company marked degrowth in its top lines for the last two fiscals, is managed to increase its margins. For Q1 of FY26 it posted losses, that raises concern. This RI is aggressively priced even though it’s at a discount of around 24%. More than double post-RI equity may pose its servicing issue in near term. There is no harm in skipping this pricey and dicey “High Risk/Low Return” Bet.
Review By Dilip Davda on October 21, 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. 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 ).
Courtesy: https://www.chittorgarh.com/
