Money doubled in less than a month: LIC and Shapoorji Pallonji-backed micro-cap multibagger jumps from Rs 57 to Rs 143!

Over a more extended period, the stock has truly dazzled investors, delivering astonishing returns of over 400 per cent, marking a remarkable 419 per cent surge in the past year alone.

In the dynamic landscape of recent years, micro, small, and mid-sized companies have emerged as the undisputed champions, delivering substantial returns to shareholders. Some have not only held their ground but outperformed their larger counterparts by a significant margin. One shining example of this trend is Gokak Textiles Ltd (GTL), a company that has not only weathered the storms but has soared to new heights.

Incorporated in 2007 through a demerger scheme of the textile arm of Forbes Gokak Limited (FGL), GTL operates two key units—an impressive spinning mill in Gokak Falls (Karnataka) and a state-of-the-art garment-manufacturing unit in the Belgaum district of Karnataka. The spinning mill, boasting a capacity of 69,792 spindles, produces not only conventional yarns but also value-added variants. Additionally, it dabbles in small volumes of ready-made items such as cotton canvas and terry towels. On the other hand, the Belgaum unit specializes in producing high-quality ready-made knitted garments, including combed polo and T-shirts tailored for export markets.

A noteworthy move in FY2012 saw GTL spin off its power-generation business into a subsidiary named Gokak Power & Energy Limited (GPEL). Holding a 51 per cent stake in GPEL, with the remaining 49 per cent under the ownership of Shapoorji Pallonji Infrastructure Capital Company Private Limited, GTL strategically harnesses the power generated by GPEL to fuel its spinning unit.

This micro-cap gem swiftly transformed into a multibagger, witnessing a meteoric rise from Rs 56.90 as of November 01, 2023, to an impressive Rs 143 as of December 01, 2023. Over a more extended period, the stock has truly dazzled investors, delivering astonishing returns of over 400 per cent, marking a remarkable 419 per cent surge in the past year alone.

Adding a layer of intrigue to the stock's narrative is the significant 4.70 per cent stake held by Domestic Institutional Investors (DIIs), with a substantial portion held by none other than Life Insurance Corporation of India (LIC), boasting a formidable 4.54 per cent ownership. As GTL continues its upward trajectory, it stands as a testament to the resilience and potential embedded in micro-cap stocks, capturing the attention and trust of institutional giants along the way.

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