An overlooked OP Jindal Group stock that has given 2,700% returns in 15 months

NEW DELHI: Investors gushing over the mouth-watering returns delivered by Jindal Steel & Power (JSPL) and in the last one year may have missed the best performer of the group.

JITF Infralogistics, an OP Jindal Group company, has delivered a whopping 2,700 per cent return since hitting its lifetime low in May last year. Such has been the demand for the scrip that in the past 37 sessions, the stock hit the 5 per cent upper circuit in all but one session. Consequently, it has nearly tripled in the past month.

The company is involved in rail freight wagon, water infrastructure, urban infrastructure and trading businesses. After going through its earnings statement, however, these businesses don’t seem to be working well.

The company has a record of making consistent losses. In the June quarter, the company posted a consolidated loss of Rs 41 crore on a revenue of Rs 206 crore. In the comparable quarter a year ago, the company posted a loss of 43 crore on a revenue of Rs 81 crore.

For the financial year 2021, the company said its losses stood at Rs 151 crore. Out of its 18 subsidiaries, 14 declared losses in the period. Out of nine joint ventures, six were in the red for the financial year. Despite the dismal show, the management has been optimistic of a turnaround. It said there was “a healthy business outlook” and “a huge potential of growth” for its major subsidiaries.

However, by conventional wisdom, none of this optimism justifies the eye-popping rally in the stock. So what is fuelling the interest in the company?

There is no clear answer to this question. The stock is not tracked by any analyst. They usually refrain from talking about such stocks.

A mail sent to the company bounced and no one answered the phone at its Delhi office.

A deep dive into the trade data shows that for most days, the trading volume remains very low — in the range of hundreds to a few thousand shares per day. In the last 30 sessions, the number of trades or transactions on the BSE went past 100 on only three occasions.

This is symptomatic of classic pump-and-dump schemes or price manipulation by a few traders to attract gullible retail investors. But this is extremely difficult to verify.

The stock is classified under the T group on BSE, meaning its shares are not allowed to be traded on an intra-day basis as a surveillance measure. Hence, the counter sees 100 per cent delivery trades.

Shareholding
The company’s latest annual report counts Cresta Fund, Albula Investment Fund and APMS Investment Fund as three of the top non-promoter shareholders in the company. These institutional investors were under a cloud recently due to their investment in Adani Group firms. Apart from them, Pinewood Strategy and LIC of India are the other major shareholders in the company, the annual report states.

The June quarter shareholding data shows that high net-worth investors hold a little less than 28 per cent stake in the company. Retail investors hold 1.31 per cent as of June, compared with 0.9 per cent at the end of March. Overall, public shareholders own a 36.98 per cent stake.

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