Hopefully bit selling can be visible in coming weeks , it will correct & for a short run can’t cross ATH
Hi Sahil Sir, great thread on twitter. I just wanted to ask when they merge their private UK subsidiary, how much dilution will that lead to? If this leads to a lot of dilution, will that become another CG overhang? Haven’t seen this point addressed much.
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The graph pattern is similar to the ones being discussed by Vivek in this video. Consolidation of more than 18 months and then a fundamental trigger.
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I would vastly prefer the equity dilution as a shareholder because it aligns interest of promoter with interest of shareholders & is a one time event versus alignment with minority shareholders which wil last for many years or decades hopefully.
I don’t think they have revealed the equity dilution yet so we can’t evaluate it yet.
Another reason to limit position size imo.
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Scheme of arrangements w.r.t. merger of Mirza UK and demerger of Red Tape is already announced and available on the exchanges. Roughly 10%-11% dilution will be there.
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| Particulars | Reference | No. of shares |
|---|---|---|
| Share Capital of Mirza International | A | 240,612,000 |
| Number of Shares of Mirza International | B | 120,306,000 |
| Amalgamation Ratio | 22 shares to be issued by Mirza International Ltd for every 10 shares of RTS Fashions | |
| Total Number of Shares of Mirza Intl post amalgamation | C | 138,201,900 |
| Additional Shares to be issued | D = C - B | 17,895,900 |
| Dilution in shareholding | E = D / B | 14.88% |
At 15% dilution, RTS Fashions is valued at roughly 270crs based on last closing mcap of Mirza (would have been valued around 220crs when the arrangement was announced). This is roughly 1.8x sales. To me seems okay given the low margins of RTS in H1FY22 (no prior year data available).
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Decent video on various types of related party transactions.
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Metro shoes good nos augurs well for Mirza too?
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Can anyone explain more
Suppose demerger happen
I have 50 share of mirza after demerger i got 50 shares of redtape and 50 shares of mirza
Red tape: in redtape all products are included jackets,belts or only footwear business is demerged?
In mirza international what will left?
From what I know, Redtape will have the non-leather shoes and all accessories under it. While the other entity will have the UK subsidiary, the leather tannery and the leather formal shoes.
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Q3 results … Look very good to me.
Disc - invested
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Looks like new subsidiary has been formed as “Redtape limited” effective Jan 1 2022 and demerger is well on track.
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The Co. came out with superlative set of December qtr. numbers which exceeded all expectations. As most of the legacy issues are being addressed, the stocks looks rather promising despite the recent run up. I was last invested in Mirza about 5 years back & had then exited as their rapidly growing domestic sales constituted only a small part of their overall sales as mentioned in my post of June 11, 2017 on this thread. This has now changed. For me what has made the stock attractive again is the fact that over the last 4-5 years, the mgt. has been focusing on increasing the scale of the Indian operations, which now are central to the investment thesis. The de-merger will further help in giving focus & greater traction to the Indian operations, with the brand Red Tape firmly established.
The other positives like the UK Co., that was till now operating as a private promoter entity, coming under the listed entity, the improving corporate governance with the guarantee commission being progressively reduced will also help. I also get a distinct feeling that some kind of a family division is happening along with the de-merger. The sense of negativity surrounding the stock currently will also help in re-rating it when the tide begins to turn! Investor sentiment can be fickle & if the changes in the Co. are for real, then the sheer weight of the numbers will determine the market cap going forward.
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I have been studying this company and I wanted to go through Concalls and investor presentations but I could not find any. Does Mirza conducts concalls and investor presentation? If yes, can anyone please provide me the sources where I can find?
Mirza stopped concalls after the pandemic started. However, there are some concalls from FY18-19 period:
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This thread of Mirza International has some quality research, that helped me re-enter the story. So, thank you all!
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Campus shoes ipo expected soon at price to sales of 10 ,Metro already at 14.
So Mirza still v cheap with demerger on & Corp Governance improving. Who all track it?
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Yet another good set of results
- Sales increased by 40% yoy.
- Profit of 30 cr against 9 cr previous year.
- Debt reduced to 78cr from 125cr.
- Leather segment finally in black.
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