FIIs bought 1,71,80,366 shares of this multibagger penny stock with Rs 361 crore order book; scrip hit upper circuit!

The stock gave multibagger returns of 135 per cent in just 1 year, 1,055 per cent in 3 years and a whopping 6,375 per cent in a decade.

Indian markets witnessed a sea of red as both the Sensex and Nifty tumbled, with the Sensex shedding 0.40 per cent and the Nifty dropping 0.40 per cent

Though the market was in red, this multibagger penny stock, “Paramount Communications Ltd” hit a 5 per cent upper circuit to Rs 89.36 per share from its previous closing of Rs 85.11. The stock’s 52-week high of Rs 96.45 and its 52-week low is Rs 28.

Paramount Communications Ltd is engaged in manufacturing wires & cables comprising power cables, telecom cables, railway cables and specialised cables. The company have handsome numbers of clients, a few of them are Larsen & Toubro, Steel Authority of India (SAIL), BSES, Bharat Heavy Electrical Ltd, Power Grid Corporation, BSNL, Tata Steel, Alcatel Lucent Enterprises, ISRO, Indian Railways, Indian Oil, NTPC, etc.

As of November 2023, the shareholding distribution indicates a rise in the stake held by Foreign Institutional Investors (FIIs) in the company. During the period from October 2023 to November 2023, FIIs acquired an additional 1,71,80,366 shares, causing their ownership to surge from 0.52 per cent to 7.61 per cent.

Paramount Communications Ltd. is pursuing a dual strategy to enhance its capital and broaden its shareholder base. The company plans to issue new shares at Rs. 66.50 each, pending shareholder approval, and increase authorized capital from Rs 70 crore to Rs 80 crore. This move aims to strengthen the company's financial position and support future growth initiatives. Notably, Anand Rathi Global Finance Limited and VLS Finance Limited, along with 76 others, will be allocated shares.

The potential fundraising involves a maximum of 2,25,24,980 equity shares of face value Rs 2. Paramount Communications, known for manufacturing wires and cables, has a market cap of Rs 2,188.74 crore and has achieved a robust profit growth of 50 per cent CAGR over the last 5 years. The company recently gained the support of Nexpact Ltd., a foreign institutional investor, which now holds the largest FII stake at 3.58 per cent, reflecting confidence in the company's impressive financial performance.

Paramount's financials paint a picture of exceptional growth. Q2FY24 saw a 28.6 per cent sales jump and a doubled net profit compared to the year-ago period. This momentum continued throughout H1FY24, with sales climbing 21.3 per cent and net profit tripling. The full year FY23 was even more explosive, with a 37 per cent sales surge and a staggering 500 per cent increase in net profit.

These exceptional results are underpinned by a strong order book of Rs 361 crore as of September 30, 2023. The portfolio is well-diversified, spanning power, railway, telecom, house wire, export, and EPC projects, providing clear visibility for continued growth. Paramount Communications is in an enviable position, primed to capitalize on its current momentum and deliver even greater returns in the future.

The shares of the company have an ROE of 21.2 per cent and a ROCE of 15 per cent. The stock gave multibagger returns of 135 per cent in just 1 year, 1,055 per cent in 3 years and a whopping 6,375 per cent in a decade. Investors should keep an eye on this Small-Cap cable manufacturing stock.

Disclaimer: The article is for informational purposes only and not investment advice.