Rajeev, d you have any views / information as to the affinity of the management for debt? There has been substantial increase in debt over the past fiscal, which is decently high cost in nature (the AR says 12-15%). At such young stages of a business, debt can be a killer. I do see that significant investment has been made in equipment. However, I would still like to know what you think of the debt situation and how the management is likely to use debt in the future.
Adding few more points from the AR 16:
- Resolution proposed to issue 6,00,000 convertible warrants to promoter group (would cause approx.2% dilution if fully converted.)
- Resolution proposed to issue 7,75,000 ESOP.
- Proposed QIP of 80 cr.
- Co. has undertaken Capex in FY17 in terms of installation of new manufacturing facility at Rudrapur, Baddi and also addition of equipmentâs to cater the increased requirement of customers aggregating around 40 Cr.
- Companyâs margin are insulated from PET prices as the change in RM price is passed on to the customers.
Regards,
Yogansh Jeswani
Disclosure: Invested
2 Likes
It is interesting to note that the promoter is bringing in fresh money at current market prices by buying 6 lakh shares. He already holds about 73.66% & this preferential issue would take his holdings to 74.36%. No appreciable increase in holdings in percentage terms. Perhaps the purpose is to shore up his holdings post the QIP. Itâs unlikely that he would want to go below 51%, so the pricing of the QIP would be key.
Another interesting fact is that the promoter could have taken his stake to close to 75% buy buying only half of the 6 lakh shares, but from the open market, yet he chose to bring in more money into the Co.
@Leading_Nowhere, I feel that if a Co. like Innovative has to grow aggressively & build capacities, it has no other option but to go for in for debt. The debt equity ratio as on March 31, 2016 still continues to be reasonable, though the mgt seems to share your concerns & is bringing in more equity.
6 Likes
Rajeev, thank you. I do not know if you have ever interacted with the management. I do note that you hold a significant stake in the company, so forgive me for thinking that you may have. This leads me to another query that you may be able to throw light on - the fluctuations in raw material prices are clearly almost entirely passed on to the customer. In this regard, do you know of any products or plans the company has to manufacture products where it has some pricing power? That is to say, it can pass on higher RM prices but choose to retain some benefits when RM prices fall?
Hi,
Ian Cassel of Microcap club said- âA MicroCap Investors Worst Enemy is Dilution.â
The above point highlighted by you- justifying the managementâs action of issuing warrants doesnât seem ok to meâŚbecause by issuing warrants they will not pay full money upfront and will dilute the equity. Hence, saying this action will bring in funds for the firm doesnât stand strong. Perhaps, a right issue would have been a better option at this stage.
Though, I like the company and have been impressed by their growth, this latest announcement of warrant issue and HUGE QIP is concerning.
In-fact, if we read the AR16 they seem to have expansion plan of 40 Cr spread over 2 years and looking at current cash flows they could have funded it by mix of internal accruals + debtâŚor at max with right issue or small QIP of say 10 CrâŚI donât seem to understand the need for such a dilution.
Regards,
Yogansh Jeswani,
Disclosure: Invested
4 Likes
Hello,
Has anyone noticed that âInnovative Tech Packâ has sold 2,75,000 shares of Jauss poly via bulk deal on 25th August 2016 ? It is almost 6% of their holding. Unable to understand the reason for this. Can anyone throw some light on this.
Disclosure : Invested
Is anyone going for AGM on 30th Sep ?
Thanks
The Co. continues with itâs aggressive growth plans. This time itâs a new plant in Assam to cater to Dabur. Attaching the Press release. While the opportunity size is admittedly huge, one hopes that the Co. has the wherewithal to scale up & execute itâs aggressive plans. This also possibly explains its plans for the QIP.
5 Likes
Is any one attending the AGM?
Disc: invested recently after going thro the AR
Great news for shareholders!
4 Likes
Thank you rajeevji for sharing your views and analysis of this scripâŚwas of great helpâŚhold and sit tightâŚ
Thanks Rajeevji for your valuable pick. Great picking!
The recent rally in the stock seemed to leave the fundamentals behind & I decided to use it to exit the counter as I was getting uncomfortable with the valuations. Besides, the growth will take a while to start getting reflected in the numbers. That is not to say that the stock canât go higher. It probably will as there is nothing wrong with the story, but I was happy to exit & hopefully redeploy.
5 Likes
Was going through the Ar 15-16 and noticed under short term loans and advances-
Chit fund subscription which has increased from 53,06,500 to 1,34,36,822. Can someone throw some light on the same?
And related to the same under âexpensesâ there is a loss on chit funds which has increased from last year! I have started following this company only recently and is there something that I am missing or cant understand from the above
Also under
âParticular of sales of products", the âOthersâ component has increased substantially from 11,33,492 to 14,95,23,189. I am thinking of writing to the company and ask for further details. If someone knows or finds out earlier please share.
Innovative Tech Pack Ltd has informed BSE that the meeting of the Share/Warrant Allotment of the Company, held on November 10, 2016 passed following resolution:
- Approved the allotment of 600,000 nos. of Warrants convertible into Equity Shares of the Company, ranking pari-passu with the existing Equity Shares of the Company, on preferential basis to the Promoter.
Allotted at not less than Rs. 34.37
Can anyone please say how much of negative impact this will have on the share price considering the market rate is Rs. 48?
Company has signed a major contract with Dabur.
below is the press release
company seems to be headed in the right direction.
1 Like
Hi, I have just started looking at this company. Some grey areas popped up when I was doing director background checks, which are listed below. It will be helpful to get your view:
-
Ketini Sayaji Raoâs name cropped up in watchout investors against a company called Visaka Polypacking for non payment of customs/excise duty. I didnât do any further digging in this regard. But interestingly couldnât find directorship details of Visaka Polypacking. Is it a shell company?
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Innovative Tech Packâs corporate office is 1109-1110, Chiranjiv Tower, Nehru Place, New Delhi -110019. Interestingly another company called Innovative Pet Containers also share the same address - 1110, Chiranjiv Tower, Nehru Place, New Delhi -110019. The director report of Innovative Pet Containers does not have any common directors with Innovative Tech Pack. There however is a common independent director for Jauss Polymer and Innovative Pet Containers - Ms. Rajani Shirish Ladda. Couldnât find any further details on Ms. Ladda. Does this mean that the promoter has a separate unlisted company in a similar business as listed company?
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There has been a case filed against Innovative Pet Containers in Delhi High Court. I wasnât able to find the details of the case. But it is recent and I think it hasnât yet come up for hearing
http://delhihighcourt.nic.in/writereaddata/upload/CauseLists/CauseListFile_JFYCYSLQ.PDF -
Chit Fund subscription is definitely there by the company. Very clear in their annual reports. However, not all chit funds are illegal. There are few companies which are listed under Chit Fund Acts. It will be helpful to understand which company does Innovative Tech Pack invest into.
Looking forward to your reply
2 Likes
I have written an email to them regarding the issues mentioned by chitrangda on-
sales@itplgroup.com, grievance@itplgroup.com, info@itplgroup.com last week, but havenât received a reply as yet. Resending again right now. If someone is aware of any other email please let me know.
Regards
Ketineni Sayaji Rao (Managing director) is director in three more companies a)Innovative Container Services Pvt Ltd (Addressed: 1-7-396/397, 1st Floor Jain Estates, Parklane Secunderabad Andhra Pradesh), b) Jauss Polymers Ltd (Addressed: 404A, 4th Floor, Chiranjiv Tower, 43, Nehru Place New Delhi, which is same building of registered address of Innovative Pet Containers Ltd and office address of Innovative Tech Pack Ltd). c) Innovative Datamatics Ltd (Addressed: 6-3-663/ Gpunjagutta, Hyderabad)
Anil Kulbhushan Barar is the common director with the other company Innovative Pet Containers Ltd (Addressed: 1110, Chiranjiv Tower, 43, Nehru Place New Delhi, which is also office address of Innovative Tech Pack Ltd)
Certainly seems like they are into competing businesses. Jauss Polymer is publicly listed and Ketineni Sayaji Rao is Managing Director there too - as per Jauss Polymer website - but in MCA he is listed as additional Director).
http://companyinfoz.com/company/innovative-tech-pack-limited
http://companyinfoz.com/company/jauss-polymers-limited
http://companyinfoz.com/company/innovative-container-services-private-limited
http://companyinfoz.com/company/innovative-datamatics-limited
http://companyinfoz.com/company/innovative-pet-containers-limited
http://www.jausspolymers.com/projects.html
1 Like
Innovative tech pack holds majority stake in Jauss Polymer, they bought it sometime in 2015.