The stock- Suchak Trading- has rallied from Rs 3 to Rs 170 since December 2013.
This week’s Did You Know focuses on a company that has reported a profit of Rs 10 lakhs in the last four years, but the stock has surged 5550 percent year to date (YTD).
The stock- Suchak Trading – has rallied from Rs 3 to Rs 170 since December 2013. Also, no shares were traded from April 2013 to November 2013.
The company is engaged in the business of warehousing and logistics and has a balancesheet of Rs 18 crore. The market cap of this company is not very big, it is around Rs 200 crore but this stock if you just map up last one year just hitting circuits day by day, it is a ladder stock.
What does this company do? They are engaged in business of warehousing and logistics sector in the annual report. The total balance sheet size is Rs 18 crore. In one of the annual reports it is mentioned that they have warehouses of a net value of Rs 50 lakh.
In the annual report they say that they have warehouses in Palanpur, near Ahmedabad.
The company has given the entire description, but there is no way one can ascertain in either their annual report or in the financials or on their website that they have actual warehouse or not because the financials from the last five years, don’t reflect any kind of business activity. However the net block value which was given for the warehouses as they say in the annual report was only Rs 50 lakh.
Coming to the financials, if one looks at just last four years, if one adds up all the sales in the last four years it is not more than Rs 1 crore. If you add the total PAT or the profit after tax what they have reported in the last four years is less than Rs 10 lakh.
Very interesting is that the promoter shareholding is nil in this company. There is no promoter in the company. The entire 100 percent is held by non-promoters. Total number of shareholders are only 525 in this company and out of that 124 shareholders own 94.36 percent equity of the company. So, it is only 124 individuals who have actually made the money in that run up of 6000 percent which happened because they controlled 95 percent equity of the company.
Of course like all other cases the game started when in June 2013 board approved preferential allotment of 47.59 lakh shares to non-promoters at a price of Rs 10 per share. Since then the stock has just moving up one way and not backed by any financials.