Jiya Eco Products Ltd (JEPL) is a SME company from Gujarat.
JEPL was incorporated in December 2011. Subsequently, the Company was converted into a public limited company in February 2014. It Filed Draft prospectus in Feb 2015 and vide prospectus dated June 22, 2015 it raised Rs. 458.28 lakhs through Initial Public Offer on BSE SME platform
Subsequently the Company was listed on BSE SME Platform on July 2015 and was migrated to BSE Main Board with effect in February 2018. National Stock Exchange Limited permitted shares of JEPL(and 13 other Companies) to trade and admitted to deal on the exchange In August 2019.
JEPL claimed to be the only listed company that manufactures biomass briquettes and pellets from agriculture waste and forest waste such as cotton stalk, groundnut shells, cumin waste, forest leaves, household waste, etc. These briquettes and pellets are substitutes of some other commonly-used feed such as coal, charcoal, firewood, diesel, petrol and LPG etc. The company also claimed Bio fuel manufactured by the it was much cheaper as compared to the prices of the petroleum products. Bio Fuel provides 30-50% savings as compared to regular fuel.
The company has an existing plant at Bhavnagar and was expanding its operations in Gandhidham.
Promoters of JEPL has other entities - Jiya Eco India Limited (Wholly Owned Subsidiary), Jiya Eco (Gandhidham) Private Limited (Wholly Owned Subsidiary) and Sahaj Chem Industries
Earlier red flags
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Jiya Eco India Limited (JEIL), a company owned by promoters was acquired by JEPL in March 2018 by JEPL from the promoters with the ultimate purpose of converting it as the wholly owned subsidiary. The Company’s subsidiary JEIL has declared two 1:1 bonus issues in quick succession in the 2nd week of September 2018 and 2nd week of June 2019. Thereafter Thereafter JEIL has filed Draft Prospectus with BSE SME Platform, -proposing a public issue of 24,96,000 equity shares of face value of Rs. 10 each To purchase bio-pellet burner machines of Rs. 480 lakhs
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Promoters of JEPL has other entities - Jiya Eco (Gandhidham) Private Limited and Sahaj Chem Industries which are engaged in similar line of business as JEPL.
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The Company issued 49,74,585 convertible warrants and at Rs. 54 each (including premium of Rs 44 each), aggregating to Rs. 26,86,27,590. Out of above, 43,20,254 equity shares has been allotted upon conversion of warrants 654,331 warrants have been forfeited in August, 2019 (Warrant holders would have lost 25% of upfront amount deposited) As a result of this and also transfer of certain shares from promoter & promoter group to public, the shareholding of Promoter & Promoter Group has decreased from 63.63% (as on March 31, 2018) to 39.53% (as on March 31, 2019) . Therafter, the Company has announced 1:1 bonus, which does not affect the shareholding pattern further.
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Receivables led sales growth
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Sale of shares by Harshad M. Monpara (Director / Promoter)
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Very long working capital cycle
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Auditors have resigned twice in last few years
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Operating cash flows are negative for most of the financial years.
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Resignation of Mr. Harshad Monpara Non-executive Promoter Director and Mr. Nitin Kapadia as Independent Director of the Company,
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Delay in plant commissioning
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Frequent Equity Dilution and Increased Borrowings
The search was conducted by GST officials at the premises of the Company and its wholly owned subsidiary in last week of December 2019
As per news item in Gujarati Newspaper high irregularities of Rs. 375 crores were noticed including bogus sales,.
None of the links relating to Investors are opening on the Company’s website .
https://www.jiyaeco.com/invest.php
The Company is yet to file its version to BSE on this News Report.
Investors need to be careful.