FII was allocated 3,25,00,000 shares on conversion of warrants into equity shares of this multibagger penny stock below Rs 20 with a Rs 2,326 crore order book!

The stock gave multibagger returns of 136 per cent in 1 year and a whopping 980 per cent in 5 years.

Salasar Techno Engineering Ltd (STEL) Board of Directors approved converting 3,25,00,000 fully convertible warrants held by Coeus Global Opportunities Fund (a non-promoter public category investor) into the same number of equity shares. The conversion price is Rs 14.40 per share (including a premium of Rs 13.40), with Coeus already paying Rs. 3.60 per warrant (25 per cent upfront cost) upon allotment in April 2024. This final payment of Rs. 10.80 per warrant (75 per cent balance) brings the total investment to Rs 35,10,00,000. Following this conversion, the company's issued and paid-up capital increases to Rs 172,67,70,290 and Coeus will now hold 3,25,00,000 equity shares, representing 1.88 per cent ownership.

Additionally, the company has paid the remaining balance of Rs 168 crore for the acquisition of EMC Ltd. (formerly known as Electrical Manufacturing Company Limited). This successful acquisition marks a significant milestone in Salasar's ongoing strategy to expand its market presence and capabilities.

Earlier to this, the company secured two major contracts. In a joint venture with Rail Vikas Nigam Ltd (RVNL) where STEL holds a 49 per cent stake, they won a Rs 173.99 crore project from Madhya Pradesh Power Transmission Company Limited (MPPTCL). Additionally, STEL secured a significant Rs 1,033.78 crore contract from Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).

Also Read: Penny stock at Rs 5.13 & FIIs increase stake: The company along with Advik Capital Ltd bought 75,00,000 shares of Industrial Investment Trust Ltd

STEL, established in 2006, acts as a single source for customised steel infrastructure solutions in India. They offer comprehensive engineering, design, fabrication, galvanisation, and installation services. Their product range includes towers (telecom, power transmission, lighting, etc.), substations, solar structures, railway electrification components, bridges, and custom steel structures. Additionally, STEL acts as an EPC contractor, undertaking complete project management for rural electrification, power lines, and solar plants. The company has an order book of Rs 2,326 crore as of December 31, 2023.   

According to Quarterly Results (Q3FY24), the net sales increased by 26.32 per cent to Rs 304.35 crore and net profit increased by 56.75 per cent to Rs 167.10 crore compared to Q3FY23 while in nine-month results (9MFY24), the net sales increased by 18.43 per cent to Rs 841.10 crore and net profit increased by 40.89 per cent to Rs 35.96 crore compared to 9MFY23. As of April 2024, promoters own 58.76 per cent, FIIs own 6.27 per cent and the public owns 34.95 per cent.

The company issued bonus shares in a 4:1 ratio to its shareholders on February 1, 2024 (ex-date). This means that for every share a shareholder held, they received four additional shares. The stock gave multibagger returns of 136 per cent in 1 year and a whopping 980 per cent in 5 years. Investors should keep an eye on this Small-Cap stock.

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