Multibagger Stocks that saw Change in Control this Year!

This year, many stocks have given Multibagger returns. Most of them did so because the valuations were cheap and Future Opportunity is Big. But few of them turned Multibagger because they witness a Big change in the Ownership!

In this article, we are going to quickly take a look at such kind of stocks where change in ownership brought a Big change in Share Price too! Significant development around Management and Ownership of these stocks have sent them to New Highs.

For the educational purpose, knowing about these companies can be really helpful for us. So, let’s see.

Magma Fincorp renamed Poonawalla Fincorp!

Adar Poonawalla (CEO of Serum Institute) acquired Magma Fincorp and renamed it to Poonawalla Fincorp. They acquired the company through an equity infusion of Rs 3,456 crore. After takeover, Consumer and MSME segment are going to be the focus areas of the company with tech and digital as key enablers for its business. New Management is looking at providing end-to-end digital journey to its customers.

From mere just ₹41 in January 2021, stock is today trading at ₹200+ levels! Stock has given nearly 400% returns this year. Share of Magma Fincorp (now Poonawalla Fincorp) has truly been a Multibagger stock for its Shareholders.

ISMT acquired by Kirloskar Group!

Kirloskar Ferrous Industries (part of Kirloskar Group) sees some interesting business and synergy benefits in ISMT. Therefore they have decided to acquire a major part of ISMT.

Considering the presence of ISMT in India and abroad and its manufacturing capacities, the acquisition will help accelerate and achieve the Kirloskar Ferrous’ intent of expanding into business, which are complementary to its existing business. Overall, acquisition is expected to put the business of ISMT on a better growth path in coming years.

This announcement has come recently as compared to acquisition timing of Magma Fincorp. But still, ISMT stock has delivered returns that are similar to Magma Fincorp share. From ₹11.50 in January, stock is trading above ₹50 today. That is nearly 350% gains.

Tata Sons Invested in Tejas!

Tata Sons acquired a controlling stake in Tejas Networks for ₹1,890 crore. Around 2 crore equity shares were issued to Panatone (Tata Sons Company) at a price of Rs 258 per share aggregating to Rs 500 crore. Against remaining ₹1,390 crore, warrants have been issued which are convertible into Equity shares.

This investment by Tata Sons provides the necessary financial resources to Tejas. It will help company to provide full stack of globally competitive wireline and wireless products and scale the business in coming years. Tejas will be able to utilise the large market opportunities available in the Telecommunication Industry.

Compared to ISMT and Poonawalla Fincorp, Tejas has rewarded its shareholders slightly lower because it rose 224% in 2021. But that is also a Multibagger return which is hard to earn in a single year.

Lyka Labs acquired by another Labs!

IPCA Laboratories bought nearly 26% shares in Lyka Labs for ₹98 crore. This acquisition will give access IPCA to jointly manage Lyka Labs with the existing promoters. IPCA offering to pick up an additional 26 per cent equity shares of Lyka from its public shareholders, following the rules of SEBI Regulations. Post this offer, IPCA might be holding more than 50% shares in the Lyka company.

Lyka Labs is engaged in the production and marketing of injectables, lyophilized injectables and topical formulations. Ipca currently doesn’t have any direct business of lyophilized injectables. Acquisition of major stake in Lyka would enable it to enter into lucrative lyophilized injectables business in India and ROW (Rest of the World) markets.

In long term, Lyka will also benefit from the entry of IPCA as the acquirer would be bringing their immense marketing expertise in the branded generic formulations business. It would pave way for the Lyka to enter into new markets where company has no business today.

Here are few more Multibagger stocks that are slightly less Liquid and have lower Market Capital (below ₹1,000 crore) but Management / Ownership change has taken place in 2021.

White Organic Retail

WOA has sold their 55.01% shares in the White Organic Retail to Suumaya Retail Limited (Subsidiary of Suumaya Industries Limited). Full Management control is now under Suumaya Industries.

Through this acquisition, Suumaya Industries has marked its footprint into Food & Beverages Retail business through inorganic route. The larger platform of “Suumaya Group” substantially widens the sourcing capability of White Organic Retail (WORL) across pan-India. This would aid WORL significantly in terms of expanding its existing product basket.

BNK Capital Markets

Old Promoters Ajit and Sanjeev (Brothers) were holding nearly 59.69% shares in the BNK Capital Markets, a Non-banking financial company engaged in the business of Investment activities. They have now taken exit from the company and sold all their shares to Lebnitze Real Estates Private Limited. Post Open Offer made to other existing shareholders of BNK, Lebnitze is today holding 86.36% shares in the company.

Mangalam Industrial Finance Limited

MIFL is registered as a Non Banking Financial Company with RBI, and currently providing various financial solutions. Old Promoter Responce Commodities sold out all their shares to 5 Acquirers (3 individuals and 2 firms).

These acquirers include — Sojan V Avirachan, Wardwizard Solutions India Private Limited, Yatin Sanjay Gupte, Venkata Ramana Revuru and Garuda Mart India Private Limited.

After Public Offer made to existing shareholders of the Mangalam Industrial Finance, these 5 acquirers (New Promoters of the company) together hold 52.54% shares in the company.

Interestingly, after acquisition, share of Mangalam Industrial is trading at extreme price! Price to Book value ratio has reached 14x while Price to Sales ratio is above 300!

Ritesh Properties

During initial months of 2021, Ritesh Properties issued 42 lakh optionally fully convertible debentures (OFCD) of face value 10 each, priced ₹22 apiece, via preferential allotment to Findoc Finvest Pvt. Ltd. One OFCD can be converted into one equity share of the company at the option of holder.

Findoc also acquired 30,41,245 Equity Shares, representing 26.24% of Share Capital from all Existing Promoters viz. Mr. Sanjeev Arora, Mr. Kavya Arora, Ms. Sandhya Arora, Ms. Ketki Arora, Sanjeev Arora HUF, Ms. Guneet Arora, Ritesh Spinning Mills Limited and Femella Fashions Limited. The purchase price is ₹22/- per equity share.

Though Management control is still with old promoters, Findoc has entered into the company as a major investor and this will have an impact on management team.

Megasoft

Sri Power Generation India Private Limited was holding 4% shares in the Megasoft. In 2021, they have acquired a lot of shares of company from Rights Issue, Open Market. Post these transactions, their shareholding in Megasoft has jumped to 24.77 percent.

Recently, Open Offer made by Sri Power to Public Shareholders of the Megasoft has ended after which, shareholding of Sri Power is going to be 43.77% in the company. This will make them the Biggest Shareholder in the company and give access to effective control over Management.

No more stocks to discuss.

That is the end of this article.

Good Luck : )