Bankrupt turns Multibagger: Shares of this company have zoomed over 300% since March 2020

On June 01 2020, the shares of Alok Industries hit an upper circuit of 5 percent at Rs 19.50 with more than 1.23 crore buy orders on the BSE.

The stock has rallied 393 percent since its low of Rs 3.95 on March 31.

Alok Industries, a company that came out of bankruptcy, has turned out to be a multibagger for investors. The company was taken over by Mukesh Ambani led Reliance Industries Ltd (RIL) along with JM Financial Asset Reconstruction Company after the Ahmedabad bench of the National Company Law Tribunal (NCLT) had last year approved the joint bid of Rs 5,050 crore.

On Monday, the shares of Alok Industries hit an upper circuit of 5 percent at Rs 19.50 with more than 1.23 crore buy orders on the BSE.

After the company’s restructuring, the shares were listed on February 27 at Rs 14 which then fell to a low of Rs 3.95 on March 31. The stock has rallied 393 percent since then.

As on March 31, Reliance Industries owned a 37.70 percent stake in the Mumbai-based integrated textile manufacturer while 45.67 percent stake was held by other high net worth investors.

It was also reported that RIL has converted the company into a PPE manufacturer, helping produce COVID-19 protective gears at one-third the cost of those imported from China. The company has redeployed Alok Industries' manufacturing facilities in Silvassa, Gujarat for exclusively manufacturing personal protective equipment (PPE) to safeguard doctors, nurses, medical staff and other front line workers engaged in fighting the COVID-19 pandemic.

Capacity has been scaled up to produce more than 1 lakh PPE kits per day and cost has been slashed to nearly Rs 650 per unit from the about Rs 2,000 apiece imported price. The facility can also be used for exporting PPE in the future.

Reliance has integrated technology, raw material from its petchem plants and 10,000 tailors after re-engineering the plant. The production started in mid-April and has been quickly ramped up to now constitute close to a fifth of India's daily PPE production capacity.