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Ultracab India's rights issue has been released, priced at 14.50 rupees.
This is expected to generate roughly 50 crores for the company, with the ratio being with 9 shares will be allotted for 25 existing shares.
Looking at the financial data, we see that Ultracab India's sales in September 2024 amounted to 55.55 crores, with the sales figure for the last financial year 2024, being 124 crores.
If we look at the balance sheet, as of March 2024, there were 52 crore worth of external borrowings, which was 17 crores higher than the March 2023 borrowings of 35 crores, most of which were long term borrowings.
From Ultracab's financial year 2024 annual report, it is clear that the major loan is from Axis Bank and other smaller loans, like a car loan, are from HDFC Bank.
Ultracab India Ltd’s current ratio in financial year 2024 was 2.86, which had increased from 1.60 in 2023, which is positive.
The debt to equity ratio also changed from 1.05 in 2023 to 1.34 in 2024 due to repayment of Non-Current Borrowings.
The major portion of all large loans is a loan from the director, while the bank loan has been reduced.
There are also quite related party transactions.
Such as with Jigar Cables Limited, Jigar Polymers Limited, Ultracab Tradelink etc. which are to be considered as red signal.
Right issue details-
The rights issue will open on the 28th of January 2025 and close on the 11th of February 2025, with the record date set as the 16th of January 2025.
The credit ratings of Ultracab India Ltd. have just been improved by Infomerics a few days ago, which is a good thing. Readers can download the rating document from below link-
https://www.bseindia.com/xml-data/corpfiling/AttachHis/4f295d17-db37-47d1-8188-b0813e51baea.pdf
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| Ultracab india ratings |
So, looking at the pros and cons and the price of the 14.50 right issue, as well as comparing the valuation with peers, I personally believe it is a good idea to subscribe to this, with a long-term view of at least 5 years.
But it is necessary to pay attention to financial results every quarter.
Be sure to consult with your financial advisor as this is not financial advice, these are personal views.
Thank you.
Dustfinance
Joindustfinance@gmail.com
www.dustfinance.in