Gammon Infraprojects

Hi All,

I wish to bring you attention to this company in infra space.

This company is quoting at 2.5 rs/share after trading at 0.7 rs till April-2021. The book value/share is 4 rs. 3 FII have raised stake in this company from 1 % to 10%. 2 of them have picked up 4.5 % each and another FPI has picked up 1%.

This company’s name has been changed to "AJR infra and tolling limited and it seems new Management is taking over this company with “Mineel Mali” as new Whole time director.

They have also sold 35 % stake in Vizag Sea port terminal to improve their cash flow and use the raised money to complete the remaining projects and monetize their other assets.

I have purchased 20000 shares at 2.7 rs and expect it to go till 4 rs in the coming months.

Any thoughts from other members of this forum?

I look forward to your views on this stock.

Shailendra Pal

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Red flags

  1. Company defaulted on debt payments

Ongoing delays in servicing of debt obligations:
As per the interaction with the lender, there are on-going delays and defaults in the servicing of debt obligations and overdrawals in fund based cash credit limits owing to strained liquidity position of the company. As per FY20 audit report (standalone and consolidated), there are defaults at standalone level as well as in various SPVs (Special Purpose Vehicles) where the accounts are classified as non performing accounts (NPA) and some of the SPVs are undergoing Insolvency Resolution Process (IRP). During FY20, the consolidated revenue of GIPL declined to Rs.395 crore as compared to Rs.526 crore in FY19 mainly on account of subdued performance of Vizag port, shortage of supply of bagasse during FY20 leading to lower power generation as well as poor toll collections in the MP road project and RGBL. Besides, the operations at the SPVs levels are stressed on account of delayed execution and stalled projects along with debt burden leading to constrained liquidity position of the company.’

  1. Owner was involved in insider trading case in past
  1. Promoters have pledged 100.00% of their holding.