Vijay Kedia-backed multibagger auto stock to keep under radar as the company invests Rs 77.81 crore in Khushbu Auto Finance Ltd
The stock is up by 42.2 per cent from its 52-week low of Rs 471 per share and gave multibagger returns of 250 per cent in just 2 years.
Indian stock markets closed higher on Monday, with the BSE Sensex Index gaining 1.77 per cent and the NSE Nifty-50 Index up 1.89 per cent.
Along with the market in green, one multibagger auto stock was also in green. The stock gained 0.53 per cent to Rs 669.60 per share, up from its previous close of Rs 666.05 per share with an intraday high of Rs 681.95 and an intraday low of Rs 666.
The buzzing stock name is Atul Auto Ltd.
Atul Auto Limited has invested an additional Rs 20.03 crore in its wholly-owned subsidiary, Khushbu Auto Finance Limited (KAFL), through a rights issue. This brings the total investment in KAFL to Rs s77.81 crore. KAFL is a non-banking finance company primarily engaged in financing three-wheelers and two-wheelers. The investment is considered an arm's length transaction and falls under related party transactions.
DSIJ’s 'Tiny Treasure' service recommends researched Small-Cap stocks with Inherent Growth Potential. If this interests you, do download the service details here.
The investment in KAFL is part of Atul Auto Limited's strategy to strengthen its subsidiary's financial position and support its growth. The company has also provided a corporate guarantee of Rs 35 crore to KAFL for a new term loan and working capital facilities. This guarantee is considered an arm's length transaction and is expected to have a contingent liability on Atul Auto Limited's balance sheet.
Atul Auto Limited is an Indian three-wheeler manufacturing company based in Rajkot. Atul Auto manufactures and sells auto rickshaws in domestic and overseas markets. The company has a market cap of Rs 1,858.23 crore.
An ace investor, Vijay Kedia along with his company (Kedia Securities Pvt Ltd) owns a 20.91 per cent stake in the company. The stock is up by 42.2 per cent from its 52-week low of Rs 471 per share and gave multibagger returns of 250 per cent in just 2 years. Investors should keep an eye on this auto stock.
Disclaimer: The article is for informational purposes only and not investment advice.
Also Read: 1,15,000 per cent returns & Rs 76,705 crore order book: Multibagger defence company bags new orders worth Rs 1,155 crore from Cochin Shipyard Ltd & others