Multibagger penny stock at Rs 61.13: This iron & steel company begins work on cost optimisation project; details inside!

From Rs 3.30 to Rs 61.13 per share, the stock gave multibagger returns of 1,750 per cent in just 1 year.

Rathi Steels and Power Limited has begun implementing a cost optimisation project aimed at improving efficiency and reducing the company's environmental impact. The project involves synchronizing the steel casting and rolling process, which will require most of the major equipment to be either on-site or delivered very soon. Once implemented and stabilized, this project is expected to significantly reduce fuel consumption, improve production yield, and minimize the company's carbon footprint, making Rathi Steels and Power Limited more sustainable. The company is targeting to initiate trial runs of the project in May 2024, with a subsequent stabilization period that may cause temporary disruptions to production and sales volume.

Earlier, the company secured a credit facility of Rs. 43.5 crore (Rs. 35 crore working capital overdraft and Rs. 8.5 crore term loan) from Kotak Mahindra Bank. This agreement allows Rathi Steel and Power Limited to access funds for day-to-day operations and specific projects. To secure the loan, Rathi Steel and Power Limited granted Kotak Mahindra Bank a first and exclusive charge on all the company's existing and future assets (movable and immovable, fixed and current) along with hypothecation of all plant and machinery at their Ghaziabad facility, a mortgage on the industrial land and building at the same location, and personal guarantees from the company's promoters, Mr Pradeep Kumar Rathi and Mr Udit Rathi.

Today, shares of Rathi Steel and Power Ltd plunged 2 per cent lower circuit to Rs 61.13 per share from its previous closing of Rs 62.37. The stock’s 52-week high is Rs 67.10 while its 52-week low is Rs 3.15.  

Also Read: Artificial Intelligence (AI) revolutionizing healthcare: A look at the present and future!

Established in 1971, Rathi Steel and Power Ltd, a Delhi-based steel manufacturer, offers Rebars and Wire Rods under the "RATHI" brand across 1,000 retail outlets and also supplies stainless steel products to major producers of downstream goods like Bright Bars and fasteners. Their clientele boasts esteemed names like the Airports Authority of India, Delhi Metro Rail, and NTPC. The company has a market cap of Rs 520 crore and positive numbers in its Quarterly Results (Q3FY24) and nine-month results (9MFY24).

The promoters of the company own a 40.32 per cent stake, DIIs own 2.53 per cent and the public owns a 57.15 per cent stake as of March 2024. From Rs 3.30 to Rs 61.13 per share, the stock gave multibagger returns of 1,750 per cent in just 1 year.

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