Micro-Cap Stock Jumps 2% Following ₹ 5 Crore Preference Share Allotment to Ashish Kacholia

A micro-cap stock climbed 2 percent after allotting preferential shares worth Rs. 5 crore to veteran investor Ashish Kacholia. The move comes as part of the company’s strategic fundraising initiative.

Price Action

During Monday’s trading session, the share price of Pratham EPC Projects Ltd reached an intra-day high of Rs.178.25 per share, rising 2 percent from its previous close of Rs.174.80 per share. 

What happened

The Board of Directors, in its meeting on March 7, 2024, approved a corrigendum addressing NSE Ltd.’s queries regarding the preferential issue of equity shares. As a result, the previously planned issuance of 4,92,611 fully paid-up equity shares has been revised to 4,52,489, with the premium per share increasing from Rs.193 to Rs.211. The total aggregate amount has been adjusted from Rs.10,00,00,033 to Rs.10,00,00,069.  

Under the revised allotment, prominent investor Ashish Kacholia will receive 2,26,245 shares at an issue price of Rs.221 per share, amounting to Rs.5 crore. Alongside him, Himalaya Finance and Investment Company has been allotted 2,26,244 shares at the same price, totaling nearly Rs.5 crore. This preferential issue is a strategic move to attract notable investors and strengthen the company’s financial position.

Business Operations

The company offers comprehensive solutions for the oil and gas sector in India, with a primary focus on City Gas Distribution (CGD). Its expertise includes the end-to-end development of pipeline networks, construction of associated infrastructure, and ongoing operations and maintenance services. By catering to CGD companies, the company plays a vital role in supporting the expansion and efficiency of India’s gas distribution network, ensuring reliable energy access and infrastructure sustainability.

Financial Performance

Pratham EPC Projects Ltd reported remarkable financial growth for H1 FY25, with revenue soaring to Rs.62 crore, reflecting an increase of 82 percent compared to Rs.34 crore in H1 FY24. Furthermore, the company’s Profit After Tax (PAT) surged by 80 percent, rising to Rs.9 crore from Rs.5 crore in the similar time period.

Ratio Analysis

The company has a Return on Capital Employed (ROCE) of 24.94 percent and a Return on Equity (ROE) of 19.18 percent. Its Price-to-Earnings (P/E) ratio stands at 31.72, higher than the industry average of 23.81. Furthermore, the company maintains a current ratio of 4.14, a debt-to-equity ratio of 0.12, and an Earnings Per Share (EPS) of Rs.5.51. 

Shareholding Pattern

As per the shareholding pattern for September 2024, the promoters of Pratham EPC Projects Ltd hold a 72.97 percent stake, while Foreign Institutional Investors (FIIs) own 1.17 percent. Domestic Institutional Investors hold 0.06 percent and Retail investors hold 25.79 percent of the company’s shares. 

Written by – Siddesh S Raskar

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