Multibagger heavy electrical equipment stock at Rs 2.26 hit upper circuit today as company approved the Scheme of Arrangement with Integra Essentia Ltd

From Rs 1.06 to Rs 2.26 per share, the stock gave multibagger returns of over 100 per cent from its 52-week low till today’s intraday high.

Today, shares of G G Engineering Ltd hit a 5 per cent upper circuit to Rs 2.26 per share from its previous closing of Rs 2.16 per share. The stock’s 52-week high is Rs 2.97 per share and its 52-week low is Re 1.06. The shares of the company saw a spurt in volume by more than 2 times on BSE.

G G Engineering (GGEL) and Integra Essentia (IEL) are merging to create a giant in diverse industries. GGEL brings its expertise in infrastructure and engineering (think steel and building supplies) to the table, while IEL contributes operations in agro products, clothing, infrastructure and energy. This merger is expected to create a more powerful company by combining strengths and streamlining operations. For every 100 shares of GGEL they hold, shareholders will get 48 shares of the new, bigger IEL. This translates to a significant shift in ownership, with IEL's public ownership increasing from 79 per cent to nearly 92 per cent, while GGEL's public ownership disappears completely. The expectation is that this merger will lead to cost savings (economies of scale), sharper management focus, and a more financially stable company. Ultimately, this ambitious plan aims to create long-term value for everyone involved.

Earlier in May 2024, the Board of Directors approved the conversion of 5,00,00,000 warrants into the same number of equity shares for a non-promoter/public category investor (Ultimateannex Trading Private Limited). This conversion comes after a previous issuance of these warrants in December 2023, where investors paid 25 per cent of the issue price upfront (Rs 0.33 per warrant) and held the right to convert them into equity shares upon paying the remaining 75 per cent (Rs 0.99 per warrant). With this conversion, the company's issued and paid-up capital increases to Rs 158,44,98,800 and the new shares have the same rights as existing ones. There are still 4,50,00,000 warrants outstanding that can be converted by their holders following the same process.

G G Engineering Limited (GGEL) is an Indian company that manufactures engineering products, infrastructure, and structural steel. The company was established in 2006 and is based in India. GGEL's products are used in many industries, including construction, infrastructure, mega projects, modern buildings, and high-rise residential and commercial projects.

According to Quarterly Results, net sales increased by 75.7 per cent to Rs 7,642.11 lakh and net profit increased by 908.5 per cent to Rs 547.03 lakh in Q4FY24 compared to Q3FY24.In its annual results, net sales increased by 113 per cent to Rs 21,210.50 lakh in FY24 compared to Rs 9,956.70 lakh in FY23. The company reported a net profit of Rs 710.47 lakh in FY24 compared to Rs 793.29 lakh in FY23.

The company has a market cap of Rs 313 crore and has delivered good profit growth of 26 per cent CAGR over the last 5 years. As of June 2024, promoters of the company own a 1.71 per cent stake while the public owns a 98.29 per cent stake. From Rs 1.06 to Rs 2.26 per share, the stock gave multibagger returns of over 100 per cent from its 52-week low till today’s intraday high. Investors should keep an eye on this micro-cap stock.

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

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