Reliance Spinning Mills Reports Significant Decline of 97.16% in Q3 FY 2080-81 Profit Amid IPO Process
Sun, Jul 7, 2024 9:21 AM on Financial Analysis, Company Analysis, Latest,
Reliance Spinning Mills has announced its third-quarter financial results for the fiscal year 2080-81, revealing a significant decline in net profit to Rs. 2.63 crores. This marks a dramatic fall of 97.16% compared to the Rs. 92.78 crores reported in the previous fiscal year (FY 2079-80).
The company, which is currently amid its Initial Public Offering (IPO) issuance process, has a paid-up capital of Rs. 1.70 Arba and other equity amounting to Rs. 5.32 Arba as of the third quarter of FY 2080-81. Revenue from sales has decreased notably by 30.02%, totaling Rs. 7 Arba during the same period. Additionally, other income saw a decline of 42.70%, reaching Rs. 2.14 crores.
Reliance Spinning Mills faced increased finance costs, which rose by 49.96% to Rs. 37.33 crores in Q3 FY 2080-81. The Annualized Earnings per Share (EPS) stands at Rs. 2.60, a sharp decrease from the Rs. 72.46 reported in FY 2079-80. The Net Worth per Share is currently Rs. 411.69.
As part of its ongoing IPO process, Reliance Spinning Mills has published an offer letter to issue shares through the book-building process, starting from 27th Ashadh, 2081. The company plans to issue 10.14% of its issued capital of Rs. 1.90 Arba, amounting to a total of 19,26,600 shares. Of these, 40%, or 7,70,640 shares, have already been issued and allotted to Qualified Institutional Investors (QIIs). The remaining 60%, or 11,55,960 shares, are designated for the general public.
From the total of 11,55,960 units, 10%, or 1,15,596 shares, will be issued to Nepalese citizens working abroad. The remaining 10,40,364 units will subsequently be offered to the general public. The share price for common investors is set at Rs. 820.80 per share, making it the most expensive IPO price to date.
The financial results and the ongoing IPO process reflect a critical phase for Reliance Spinning Mills as it navigates through reduced profitability and seeks to expand its shareholder base amidst challenging market conditions.
Major Financial Highlights:
| Particulars (In Rs '000) | Reliance Spinning Mills | ||
|---|---|---|---|
| Q3 2080/81 | Q3 2079/80 | Difference | |
| Paid Up Capital | 1,707,340.00 | 1,707,340.00 | 0.00% |
| Other Equity | 5,321,635.52 | 5,636,780.46 | -5.59% |
| Property, Plant & Equipment | 9,415,739.59 | 9,458,646.01 | -0.45% |
| Inventories | 1,912,225.98 | 2,564,101.88 | -25.42% |
| Revenue from Sales | 7,002,146.84 | 10,005,809.90 | -30.02% |
| Selling Expenses | 86,785.21 | 191,543.94 | -54.69% |
| Other Income | 21,476.54 | 37,479.88 | -42.70% |
| Administrative Expenses | 155,695.59 | 374,291.27 | -58.40% |
| Finance Costs | 373,398.37 | 249,006.38 | 49.96% |
| Income Tax | 0.00 | 63,515.67 | -100.00% |
| Net Profit | 26,323.06 | 927,821.23 | -97.16% |
| EPS (In Rs.) | 2.06 | 72.46 | -97.16% |
| Net Worth per Share (In Rs.) | 411.69 | 430.15 | -4.29% |
