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Multibagger alert: This stock gave 1,285% returns in one year

Tanya Aneja     June 3, 2021

Share of CG Power & Industrial solutions has delivered more than 1200 per cent returns to its shareholders in the last 12 months. The share stood at Rs 6.3 on June 03, 2020. It has zoomed to Rs 87.30 today, translating into gains of 1285 per cent during the period. In comparison, Sensex rose 53 per cent in one year.

Rs 5 lakh invested in CG Power & Industrial solutions share a year ago would have turned into Rs 69.28 lakh today.

The stock has gained 90 per cent since the beginning of this year. It ended 0.18 per cent lower at Rs 85.20 against the previous close of Rs 85.35 on BSE.

The share stands higher than 20 day, 50 day, 100 day, and 200-day moving averages and lower than 5 day and 10 day moving averages.

In the March quarter, the domestic institutional investors, foreign portfolio investors, and promoters have raised their shareholding in CG Power & Industrial Solutions.

Jitesh Ranawat, Head Institutional Sales at Marwadi Shares and Finance Limited, told Business Today, "CG power has witnessed an ownership change. Post the fraud, the company was taken over by Murugappa group through its entity Tube Investment. The market has given a thumbs-up to the new management.

"Although on valuations front, it is richly valued but considering the management guidance of Rs 5000 crore revenue number and Rs 500 crore EBITDA, it looks promising play in capital goods and power sector," he noted.

He further added that the company has reduced the debt drastically as major banks have taken haircuts on their exposures. One can look at the stock on declines, as at current levels, it looks richly valued.

The company reported a net loss of Rs 534.59 crore for the quarter ended December 2020, down 154.48 per cent from Rs. 210.07 crore in December 2019.

Net Sales stood at Rs 819.52 crore in December 2020 down 30.45 per cent from Rs. 1,178.32 crore in December 2019.

On May 11, 2021, the board of CG Power & Industrial Solutions approved the preferential allotment of 1.38 crore equity shares.

The board has approved the issue and allotment of 1,38,45,000 equity shares of the company of face value of Rs 2 each on a preferential basis at Rs 73.10 including a premium of Rs 71.10 per Equity Share aggregating to Rs 101.20 crore.

The Company had entered into a guarantee agreement under which it had guaranteed the payment/repayment obligations of CG International Holding Singapore Pte. Limited, a wholly-owned subsidiary of the Company, under the credit facilities aggregating to 44 million euros availed by CG Singapore from SCB.

In August 2020, CG Power and Murugappa Group firm Tube Investments of India Ltd (TIIL) said lenders have accepted one-time settlement and restructuring of debt.

In November 2020, Tube Investment of India acquired 50.62 per cent stake in CG Power & Industrial Solutions.

CG Power and Industrial Solutions Limited is primarily a B2B company that operates across two major lines of business. These are the Power Systems Business Unit and the Industrial Systems Business Unit.


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