Microcap auto ancillary company sells idle asset for Rs 4,85,52,000; Stock price under Rs 100, do you own it?

Shares of the company have generated an impressive return of 62 per cent in the last six months.

Rasandik Engineering Industries Limited, incorporated in 1986, recently executed a sale deed on September 29, 2023, for the disposal of its idle assets. The company specializes in manufacturing critical engineering components for various industries, including automobiles and household goods.

As per the details, it sold its idle asset, an industrial plot numbered A-1/A-2, consisting of land and building, situated at Site-B, Surajpur Industrial Area, District: Gautam Budh Nagar, Uttar Pradesh-201306, to Navavya Eknath India Private Limited for a sum of Rs 4,85,52,000 (Four crores eighty-five lakhs fifty-two thousand only).

Importantly, the buyer is not affiliated with the Promoter, Promoter Group, or Group Companies, making this transaction unrelated to party involvement.

The company has not disclosed how it plans to utilize these funds, but selling the idle asset provides the company with immediate cash, which can be used for various purposes, such as paying off debt, investing in growth initiatives, or distributing dividends to shareholders.

Furthermore, the funds generated from the sale can be reinvested in strategic initiatives or used for debt reduction, helping the company achieve its long-term goals. If so, the company becomes more attractive to investors.

Shifting the focus to the stock performance, it opened Friday’s trading session at Rs 94 per share, a 6.5 per cent increase from the previous day's closing price of Rs 88.28 per share on the BSE, and finally concluded the day at Rs 89.45 per share on Friday.

The current market capitalization of the company stands at Rs 53.45 crore, and the stock has generated an impressive return of 62 per cent in the last six months and a multibagger return of 500 per cent in a decade.

Rasandik Engineering Industries Limited is a prominent player in the manufacturing sector, offering engineering solutions, design, and production of sheet metal components and assemblies for the automobile industry. Their product range includes sheet metal components, press tools, and dies designed for high-tensile applications in various sectors, including Heavy Commercial Vehicles (HCV), Light Commercial Vehicles (LCV), Passenger Vehicles (PV), tractors, and the 2-wheeler industry. Additionally, they are engaged in heavy fabrication work for railways.

Investors should keep this stock on their radar.

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