Avantel Limited , a leading player in the communications and signal processing products sector, has submitted its monitoring agency report for the quarter ended June 30, detailing the utilization of funds raised through its recent Rights Issue. The report, prepared by CARE Ratings Limited, confirms that the company has appropriately used the Rs 80.91 crore raised, adhering to the purposes stated in the offer document.

Fund Utilization Breakdown

During the quarter, Avantel utilized Rs 26.49 crore of the raised funds:

• Rs 5.60 crore for vendor payments related to the new manufacturing facility
• Rs 19.94 crore for general corporate purposes, including:
  • Rs 7.34 crore for working capital reduction
  • Rs 3.48 crore for salaries
  • Rs 5.92 crore for inventory payments
  • Rs 3.20 crore for administrative expenses
• Rs 0.95 crore for issue-related expenses

The remaining Rs 54.42 crore is currently held in the monitoring account, awaiting future deployment.

Rights Issue Details

The Rights Issue was aimed at funding capital expenditure for:

1. Establishing a new manufacturing facility for electronics and aerospace applications
2. Setting up GSaaS (Ground Station as a Service) infrastructure

The company allotted 2,02,26,100 equity shares of Rs 2 each to eligible shareholders at an issue price of Rs 40 per share (Rs 2 face value and Rs 38 share premium).

Financial Performance

Avantel's standalone financial results for the quarter show:

The company's consolidated results reflect:

Segment Performance

Avantel operates in two segments:

1. Communications and signal processing products

   • Revenue: Rs 5,188.16 lakh
   • Segment result: Rs 669.94 lakh profit

2. Health Care

   • Revenue: Rs 7.64 lakh
   • Segment result: Rs 139.70 lakh loss

Management Commentary

Dr. A Vidyasagar, Chairman & Managing Director of Avantel Limited, stated, "We are pleased to report that the proceeds from our Rights Issue are being utilized as per the objectives outlined in our offer document. This strategic deployment of funds is aimed at enhancing our manufacturing capabilities and expanding our service offerings, which we believe will drive long-term growth for Avantel."

Looking Ahead

With a significant portion of the Rights Issue proceeds still unutilized, Avantel is well-positioned to continue its expansion plans. The company's focus on communications, signal processing, and diversification into healthcare services demonstrates its commitment to creating multiple growth drivers anchored on its core competencies.

Investors and stakeholders will be keenly watching how the remaining funds are deployed and the impact on Avantel's future performance and market position.

Avantel Limited, a leading provider of communications and signal processing products, has announced its financial results for the first quarter, revealing a mixed performance with flat revenue growth and a substantial decline in profitability.

Revenue Performance

For the quarter, AVANTEL reported a marginal increase in revenue, reaching ₹519.00 crore compared to ₹518.00 crore in the same period last year. This represents a minimal year-over-year growth of approximately 0.19%.

Profitability Metrics

Despite the stable revenue, the company experienced a significant downturn in its profitability metrics:

• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) fell to ₹104.00 crore from ₹142.00 crore in the previous year, marking a substantial decline of about 26.76%.
• EBITDA Margin: The EBITDA margin compressed to 20.04% from 27.41% year-over-year, indicating increased pressure on operational efficiency.
• Net Profit: Consolidated net profit saw a sharp decrease, dropping to ₹32.00 crore from ₹74.00 crore in the same quarter last year, representing a significant decline of approximately 56.76%.

Segment Performance

AVANTEL operates in two primary segments:

1. Communications and Signal Processing Products: This segment, which includes manufacturing of wireless front-end, satellite communication, embedded systems, and related services, remains the company's core business.
2. Healthcare Services: A relatively new venture for the company.

The communications and signal processing products segment generated revenue of ₹518.82 crore for the quarter, while the healthcare segment contributed ₹0.76 crore.

Financial Position

As of the end of the quarter, AVANTEL reported:

Rights Issue

During the quarter, on May 29, AVANTEL completed a rights issue, allotting 2,02,26,100 equity shares of ₹2 each at an issue price of ₹40 per share (including a premium of ₹38 per share).

Investors and analysts will likely be watching closely to see how AVANTEL addresses the profitability challenges in the coming quarters, particularly given the company's strong position in the communications and signal processing sector. The management's strategies to improve operational efficiency and leverage the recent capital raise will be key factors to monitor in the near term.