Rights Issue Alert: This penny stock under Rs 2 is set to trade ex-rights today; do you own it?

Heavy buying was observed in this micro-cap stock, accompanied by a spurt in volume by more than 1.06 times on BSE.

On Monday, one of the Top Gainers on BSE, shares of G G Engineering Ltd zoomed 12.28 per cent to an intraday high of Rs 1.28 per share from its previous closing of Rs 1.14. At 3:30 pm, shares of the company ended the day in green, up 7.89 per cent to Rs 1.23 per share.

The stock is up by up by 40 per cent in just 15 days with the sudden surge in the stock price attributed to the recently announced rights issue by the company. The company has authorized a rights issue in the ratio of 38:29, with today, July 11, 2023, being the record date for eligible shareholders.

The issue price of the rights issue is Rs 1 per equity share having a face value of Rs 1 each. The issue opening date is Thursday, July 20, 2023 and the issue closing date is Monday, July 31, 2023.

G G Engineering Limited manufactures electric power generators. The company develops diesel generators and engines for power management. The net sales increased by 493 per cent to Rs 24,.93 crore and net profit increased by 2,018 per cent to Rs 5.37 crore in Q4FY23 over Q4FY22.

In FY23, net sales skyrocketed 558 per cent to Rs 99.57 per share and net profit skyrocketed 3,404 per cent to Rs 9.93 over FY22. The stock has a PE of 5.9x whereas the sectoral PE is 26x.

 Heavy buying was observed in this micro-cap stock, accompanied by a spurt in volume by more than 1.06 times on BSE. Investors should keep this penny stock under the radar.