From bankruptcy to becoming a stock which has given investors 822% returns in the past few months, the story of Alok Industries has one name associated with it which has changed the fortunes of the firm on the stock exchanges.
From bankruptcy to becoming a stock which has given investors 822% returns in the past few months, the story of Alok Industries has one name associated with it which has changed the fortunes of the firm on the stock exchanges. The name is Mukesh Ambani. Alok Industries, once a bankrupt textile manufacturer based out of Mumbai, was taken over by Mukesh Ambani’s Reliance Industries along with JM Financial Asset Reconstruction company earlier this year. Post restructuring, Alok Industries stock was listed on the bourses on February 27, at a price of Rs 14. The scrip now trades at Rs 36.15, for the first time since the 2008 global financial crisis.
Shares of Alok Industries, after listing on the bourses post-restructuring, were first caught in a severe fall that equity markets across the globe witnessed in March. Alok Industries’ shares tanked to as low as Rs 3.92 per share by the end of March. However, since then the stock has staged a smart recovery, going higher and higher with each passing day. Mukesh Ambani’s Reliance Industries along with JM Financial Reconstruction company won the bid for Alok Industries for Rs 5,050 crore, of which Rs 4,550 crore were paid by Reliance Industries. The Ahmedabad bench of the National Company Law Tribunal had in 2019 approved the joint bid.
At the end of March 2020, Reliance Industries held over 83.33 crore shares in the textile manufacturer. RIL has also infused Rs 500 crore in equity into the company since then. In the October-December quarter, Alok Industries posted a consolidated net loss of Rs 194.49 crore which was significantly less than the Rs 1,307 crore loss it posted in the same period a year earlier. Total income of the company also increased to Rs 877 crore from Rs 714 crore, on-year basis. Alok Industries owed lenders Rs 30,000 crore before heading into insolvency proceedings.
Recently, Alok Industries has been asked by Reliance Industries to manufacture PPE kits as the country fights the novel coronavirus pandemic, according to reports. Alok Industries will manufacture more than 1 lakh PPE kits per day at a cost of Rs 650 per unit, which will be at one-third the cost of PPE kits imported from countries like China.