This Mukul Agrawal portfolio firm’s shares have rocketed 70x since IPO last year
The junior bourses that cater to small and medium enterprises (SME) are not on the radar of serious investors very often, but off and on some companies break out on the big league. One such company that has made investors looking out for gems sit up is EKI Energy Services.
EKI Energy has had a dream run since going public. The company had sought a market value of just Rs 68 crore, or under $10 million, when it floated its initial public offering (IPO) in March 2021. Its market cap rocketed to over Rs 8,550 crore, or more than $1.1 billion, this January.
The stock price has scaled back since then but the company still commands a valuation of Rs 4,900 crore. This means it is still 72 times higher than its IPO valuation.
The company counts among its investors ace stock market investor Mukul Agrawal and Next Orbit Venture Fund.
Founded in 2008, EKI Energy Services commenced its business as a climate change advisory services such as consultancy for registration, validation, monitoring, verification, insurance, and trading of eligible carbon credits projects.
Later, it stepped forward by getting into carbon credits trading, electrical safety audits and other services.
Promoted by Manish Kumar Dabkara and family, the abnormal rise in its share price is not a fluke. The company has scaled up its business like a tech startup and has also migrated from the SME Exchange to the main board.
More recently, it announced a bonus issue to increase stock liquidity as the share price is now hovering around Rs 7,000 apiece.
For the year ended March 31, 2022 its revenue rocketed over nine-fold to Rs 1,800 crore with EBITDA of Rs 515 crore and a net profit of Rs 383.4 crore.
EKI also recently established a subsidiary, GHG Reduction Technologies, to strengthen the backward integration of credit supply chain through its green cooking initiatives which replaces traditional cookstoves across rural homes. The subsidiary commenced operations at its Nashik plant for the manufacturing of efficient cookstoves in April.
The company also joined hands with Shell to work on the conservation, enhancement and restoration of natural ecosystems such as forests, agriculture, grasslands, wetlands and blue carbon. It will invest into the projects and claim carbon credits.
Whether it can capitalise on the huge leap it has already seen and become one of the biggest success stories among SMEs is to be seen, but its financial performance does buttress its staggering jump in its valuation.
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