Gujarat-based Franklin Industries Ltd. (BSE: 540190), engaged in the trading of agriculture commodities and providers of contract farming services, has opened for subscription on May 24, 2024 for rights issue
The funds raised through the issue will be used to fund the company's expansion plans, including working capital requirements and general corporate purposes.
The right issue of the company is offered at a price of Rs 3.58 per share as compared to the closing share price of Rs 7.50 per share on May 24, 2024. The rights issue will close on June 11, 2024.
Highlights:
The company will issue 10.84 crore fully-paid equity shares at an issue price of Rs 3.58 per share.
Shares in Rights Issue are priced at Rs 3.58 per share as compared to the closing share price of Rs 7.50 per share on May 24, 2024; Rights Issue will close on June 11, 2024.
Right Issue funds will be utilised to meet the working capital requirements, fund company's expansion plans, and for general corporate purpose
The rights entitlement ratio for the proposed rights issue is 3:1: 3 rights equity shares of Rs 1 each for every 1 fully paid-up equity shares held by the eligible equity shareholders
For FY23–24, Total income rise 148 percent year over year to Rs 50.96 crore, and net profit grew multi-fold to Rs 10.46 crore The Company will issue 10,84,50,000 fully paid-up Equity Shares of the face value of Rs 1 each for cash at a price of Rs 3.58 per Equity Share (including a premium of Rs 2.58 per Equity Share), aggregating to Rs 38.83 crore.
The Rights entitlement ratio for the proposed issue is fixed at 3:1 (3 Rights equity shares of face value of Rs 1 each for every 1 fully-paid equity share held by the equity shareholders on the record date of May 13, 2024). The last date for On-market Renunciation of Rights Entitlements is June 5, 2024.
Out of the issue proceeds of Rs 38.83 crore, company intends to use Rs 29.26 crore towards working capital requirement and Rs 9.31 crore towards general corporate purposes.
Incorporated in 1983, Franklin Industries Ltd is engaged in the trading of agricultural commodities such as wheat, rice, maize, vegetables (including capsicum, tomato, etc.), fruits (including mango, watermelon, grapes, etc.), and other agricultural products.
The company has recently announced its strategic initiative to diversify its business operation in contract farming. Contract farming offers significant potential for expansion and innovation within its business framework. This initiative aligns with the company's vision to optimize agricultural practices, leverage technological advancements, and establish mutually beneficial partnerships with local farmers and agricultural stakeholders.
The company practices contract manufacturing by leasing agricultural land where they cultivate Cucumbers, Onions, and Castor. The company shares a part of the yield with the farmers who work on a contractual basis on the leased land, thereby supporting the local farmers' community.
The company also provides contract manufacturing services for agricultural products such as cucumber, onion, and castor. The company sources these products from manufacturers by paying an advance payment or according to agreed terms, and then sells them to our network of distributors. Through our presence in the market, we have developed strong relationships with both farmers and the wholesaler/retailer community.
For FY23–24 ended March 2024, the company has a total income of Rs 50.95 crore, rise of 148 per cent as compared to the total income of Rs 20.52 crore.
The net profit of the company for the year ended March 2024 was reported at Rs 10.46 crore, multi-fold growth from net profit of Rs 21.43 lakh in the corresponding period last year. company has completed a stock split from Rs 10 per share to Rs 1 per share in January 2024.
Assuming full subscription, post-issue outstanding equity shares will increase to 14.46 crore equity shares from existing 3.61 crore equity shares.
