Jhunjhunwala, Utpal Sheth-backed small-cap stock attracts more marquee investors

Raghav Productivity Enhancers, a small-cap stock that attracted late stock market investor Rakesh Jhunjhunwala to come as a back one-and-a-half years ago, lured in more superstar investors last quarter.

Previously known as Raghav Ramming Mass, the Jaipur-based company that was started in 2009 is into acidic premix ramming mass, neutral ramming mass, ramming mass powder, silica ramming mass, and casting powder.

It is led by Sanjay and Rajesh Kabra, and manufactures ramming mass for induction furnaces and quartz powder.

In 2021, it attracted Jhunjhunwala to invest Rs 31 crore via compulsory convertible debentures (CCDs). On conversion, the late investor would have around a 5% stake in the company. The CCDs were allotted at an implicit price of around Rs 515 apiece.

The company’s share price had risen almost ten-fold within a year when the Jhunjhunwala deal was disclosed. It declined thereafter and was trading at the same level at which Jhunjhunwala bet on the firm for much of 2022. It shot up again last quarter as it attracted more marquee investors.

In particular, Mukul Agrawal and Ashish Kacholia have built small positions in the company last quarter, picking up a 1.6% and 2.1% stake, respectively.

Notably, even before Jhunjhunwala decided to invest in the firm, Raghav Productivity had attracted Utpal Sheth, a long-time associate of Jhunjhunwala who together built their investment firm Rare Enterprises.

Raghav Productivity Enhancers went public on the SME exchange over six years ago and has seen its share climb over 25x from its issue price of Rs 39.

The firm had seen its topline take flight last year. Revenue jumped from Rs 64 crore to Rs 100 crore in the year ended March 2022. Net profit doubled to Rs 18 crore in the same period.

In the first half of the current financial year, the company against witnessed a sharp uptick with revenues rising over 50% to Rs 69 crore and net profit rising to Rs 11.5 crore from Rs 8.5 crore in H1 FY22.