20% Upper Circuit: Penny stock skyrockets after it plans to raise funds by issuing 27,74,632 shares

A micro-cap infrastructure stock has hit the 20 percent upper circuit limit, raising curiosity about the factors behind its rapid growth. The surge follows significant developments that have spurred investor interest, with strong fundamentals and strategic moves propelling the stock’s momentum. 

Price Movement 

During Thursday’s trading session, MBL Infrastructure Ltd’s share price hit an intraday high of Rs.41.40 apiece, hitting a 20 percent upper circuit from the previous close of Rs.34.50 apiece. Over the past five years, the stock has delivered over 1,500 percent returns.

What Happened

A surge in the shares of MBL Infrastructure Ltd was fostered by the announcement of an upcoming board meeting scheduled for Friday, 28th March 2025. During this meeting, the Board of Directors will consider and approve a preferential allotment of 27,74,632 equity shares at an issue price of Rs.61.10 per share, including a premium of Rs.51.10 per share. This move is expected to raise additional capital, further strengthening the company’s financial position and supporting its future growth initiatives.

Business Overview

MBL Infrastructure Ltd., established in 1995 and headquartered in New Delhi, is a leading player in India’s civil engineering and infrastructure sector. The company specializes in executing a wide array of infrastructure projects, including highways through Engineering, Procurement, and Construction (EPC), Build-Operate-Transfer (BOT), and Operations & Maintenance (O&M) models. 

Additionally, MBL Infrastructure is involved in the construction of residential and commercial buildings, the development of urban infrastructure, and the enhancement of railway and metro systems. Listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) since 2010, the company has demonstrated steady growth and market stability.

Also read: Bulk Deals: Microcap stocks jumps up to 5% after 19,98,973 shares changed hands

Current Projects 

MBL Infrastructure Ltd. is currently engaged in several key infrastructure projects. In the Roads & Highways Infrastructure sector, the company is working on the development and operation of the Bikaner Suratgarh section of NH-62, with a total project amount of Rs.64.83 crore. This project, which was originally scoped for completion, is undergoing additional work with an updated scope amounting to Rs.2.34 crore. 

For maintenance projects, MBL Infrastructure is responsible for the upkeep of the Bikaner-Suratgarh section of NH-62, with a total contract value of Rs.23.26 crore. Additionally, the company is maintaining the Waraseoni-Lalbarra Road in Madhya Pradesh, with a contract value of Rs.7.32 crore. The total value for these maintenance projects stands at Rs.23.99 crore.

Financial Overview

MBL Infrastructure Ltd’s recent financial update for Q3 FY25 shows a consolidated revenue of Rs.30 crore, reflecting a 9 percent decline from Rs.33 crore in Q3 FY24. The company also reported a significant drop in net profit, with a 71 percent decrease, posting a loss of Rs.31 crore compared to a profit of Rs.9 crore in the same period last year, primarily due to a substantial increase in expenses.

Ratio Analysis

The company has a Return on Assets (ROA) of 6.74 percent and a Return on Capital Employed (ROCE) of 6.42 percent. Furthermore, the company maintains a current ratio of 0.43, a debt-to-equity ratio of 0.95, and an EV(Enterprise Value) to Sales of 10.98.

Written by – Siddesh S Raskar

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