Penny stock: G G Engineering Ltd rights issue open now, issue to close on July 31, 2023; Do you own it?

Heavy buying was seen on this micro-cap stock with 33 per cent returns in just 1 month and saw a spurt in volume by more than 1.08 times on BSE.

G G Engineering Ltd (BSE: 540614) is a leading player in the infrastructural & structural steel, and engineering products industry. The company’s rights issue is currently open, and the issue is due to close on July 31, 2023. The company’s right Issue is of up to 49,88,20,215 fully paid-up equity shares of the face value of Rs 1 each for cash at a price of Rs 1 per equity share aggregating up to Rs 4,989 lakh on a rights basis to the eligible equity shareholders in the ratio of 38 equity share for every 29 fully paid-up equity shares held by the eligible equity shareholders on the record date (July 11, 2023).

Earlier, the company announced stellar financial performance for the quarter ended June 30, 2023.

Standalone Financial Performance Comparison – Q1FY24 v/s Q1FY23

• Revenue from Operations grew by 143.42 per cent from Rs 778.35 lakh in Q1FY23 to Rs 1894.66 lakh in Q1FY24.
• EBITDA increased by 226.88 per cent from Rs 16.22 lakh in Q1FY23 to Rs 53.02 lakh in Q1FY24.  
• EBITDA margins increased from 2.08 per cent in Q1FY23 to 2.79 per cent in Q1FY24 by 71 basis points.
• PAT increased by 145 per cent from Rs 13.84 lakh in Q1FY23 to Rs 33.88 lakh in Q1FY24.

Commenting on the Q1FY24 Performance earlier, the Management added,

"We are pleased to announce the remarkable financial results for the Q1FY24, which demonstrate our continued commitment to growth, efficiency, and value creation. We have achieved significant improvements YoY in revenue, EBITDA, EBITDA margins, and profit after tax, reflecting the success of our strategic initiatives and the dedication of our team.

Despite the prevailing economic challenges and uncertainties, we are confident in our ability to navigate the landscape and capitalize on opportunities that lie ahead. We will continue expanding our market presence to drive sustained growth and shareholder value.”

G G Engineering Limited manufactures electric power generators. The company develops diesel generators and engines for power management. On Tuesday, shares of G G Engineering surged 3.48 per cent to Rs 1.19 per share with an intraday high of Rs 1.19 per share and an intraday low of Rs 1.12 per share.

The shares have a PE of 5x whereas the industry PE is 27.50x. Heavy buying was seen on this micro-cap stock with 33 per cent returns in just 1 month and saw a spurt in volume by more than 1.08 times on BSE. Investors should keep this penny stock under the radar.

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