Rakesh Jhunjhunwala portfolio stock dips ahead of record date for bonus issue

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Shares of Man Infraconstruction plunged over 5% in Thursday’s deals ahead of its record date, which is November 19, 2021, for the purpose of ascertaining the eligibility of shareholders entitled for issuance of bonus equity shares of the company 

Last month, the company’s board approved the issue of bonus equity shares in the ratio of 1 (one) new equity bonus share of Rs. 2/- each for every 2 (two) existing equity shares of Rs. 2/- each held by the shareholders of the company.

“Man Infra has almost zero net debt and hence it is able to fulfill its obligations timely irrespective of delay in construction projects. We also take comfort from the fact that the company had an order book of Rs. 1218 cr. as of FY21, which provides us good revenue visibility in the short term. Additionally we also like the fact that the promoters have been gradually increasing their stake in the business over the last 2-3 years,” said Ujjawal Kumar, Research Analyst, Green Portfolio.

Man Infra is a leading construction company in India which provides construction services for port infrastructure, residential, industrial, commercial and road infrastructure projects. From 25 per share level in October 2020, Man Infra shares currently trading at over 90 apiece on the BSE.

“There are a lot of tailwinds for the construction industry going forward and we believe that the valuation is also not too expensive vs peers in this space. Having said that, construction industry is cyclical and one must plan their entry and exit points while taking any position in such stocks in our view,” Kumar added.

As per the BSE shareholding pattern, Indian ace investor Rakesh Jhunjhunwala holds 30,00,000 shares or 1.21% stake in Man Infra as of September 2021. His stake remains unchanged from the previous quarter of April-June period.

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