This reimbursement is likely electric expenses incurred at the sites which are owned by the promoters. Suyog bills exact cost of electricity expenses to the telecom operator, recognizes it as a separate line item and passes it on to the tower owner.
Revenue from operations has a separate line item called reimbursement income, which is ~32 cr.
Reimbursement to Shivshakar Lature is a very large amount (28 cr.) and there are no line items in the P&L statement that big (except for cost of goods sold).
Thanks for the detailed reply, sir! Much appreciated.
Wrt reimbursement to Mr. Shivshankar Lathure, it jumped (as you know) from ~3Cr to ~30Cr. I too was unable to find a line item in PL which showed this big jump vs last year.
If the impact of money they have paid him is reflecting is hidden in the BS, they are misleading by using the term ‘reimbursement’ .
(Disc: Not invested, started reading the latest AR as this company came up in one of the screens I ran)
Are there any new developments in Suyog? Big volumes on certain days before results when a major chunk of equity changed hands. Was this rally only in anticipation of a good result or were there any other developments in the company regarding 5g deployment, new orders etc that are not in the public space yet?
Suyog Telematics (STL) has approved to issue warrant on 12th Aug 2023 at price of Rs. 570 (vs CMP of Rs. 1,176)
Post the warrants promoter’s stake will increasing by ~10% from ~47% to ~57%.
What is the purpose of issuing warrants?
STL plans to triple its tower asset base by adding 10,000 small cell towers to the current base of ~4,300 towers over the next two years. Yes, its 10,000 and not a typo ie., 2.3x from the current capacity.
Total money required for the capex is Rs. ~600 Cr. (Rs. ~6 lakh per tower).
This Capex will be divided in two years.
In FY25, the company plan to invest Rs. ~250-300 Cr.
Source of money
The company is expecting Rs. 150-170 Cr through internal accruals in FY24 and FY25. Further, Rs. 60 Cr is infusion by the promoters through warrants.
The additional Capex may be through borrowings or further warrants issuance.
Observation
The allotment of warrants to promoters reflects their confidence in the company’s future prospects and commitment to its growth strategy.
While there is no clear guidance for the second-year capex plan. It is expected that the successful completion of the first year’s Capex will yield adequate cash flow for expansion in the second year.
Source - Bastion research