Shares of micro-cap firm Auri Grow India Ltd. witnessed significant investor attention on Wednesday, December 17, following a major development. Hong Kong-based foreign institutional investor (FII) Luminary Crown has expressed formal interest in acquiring a substantial stake in the company, proposing a price far above its current market value.
Details of the Proposed Strategic Investment
Luminary Crown has issued a non-binding Letter of Intent (LoI) to explore purchasing up to 24% equity in Auri Grow India. The proposed deal indicates a price of ₹2 per share. This is a massive premium compared to the stock's closing price of ₹0.84 on December 16. The investment is planned through a primary issuance via preferential allotment and is subject to necessary regulatory and shareholder approvals.
As part of the proposed minority investment, Luminary Crown has sought the right to nominate one director to Auri Grow's board. The company clarified that this would come with standard investor protection rights and would not lead to any change in management control.
Three-Pronged Growth Strategy Outlined
The LoI lays out a roadmap for strategic collaboration aimed at accelerating Auri Grow's transformation. The key initiatives include:
1. Rice Export Platform: The partnership aims to strengthen Auri Grow's role in rice aggregation, processing, and export. The focus will be on key markets in the Gulf Cooperation Council (GCC) and select European regions, leveraging India's competitive strength in this sector.
2. High-Tech Farming Project: Luminary Crown intends to lead a hydroponics and aeroponics farming project. This sustainable, tech-driven initiative carries an estimated cost of ₹55 crore and is projected to generate annual revenues between ₹180 to 200 crore, with a net margin of around 13%.
3. Organic Farming on Company Land: The plan includes establishing organic farming operations on Auri Grow's existing land bank for a minimum period of five years, with commercial terms to be finalized.
Financial Surge and Market Performance
Auri Grow's financial metrics have shown explosive growth recently. The company's sales for FY24-25 skyrocketed to ₹175.55 crore, a near tenfold jump from ₹16.76 crore in FY23-24. Net profit for FY25 followed suit, climbing to ₹7.17 crore from just ₹51 lakh a year earlier.
Commenting on the LoI, Director Pratik Kumar Patel stated, "This represents a strong strategic interest in the Company’s transformation into a high-growth agriculture, agri-technology and export-oriented enterprise." He emphasized that the LoI is non-binding and no definitive agreements are in place yet, with the company committed to making timely disclosures.
On the market front, while this penny stock has declined 32% over the past year, it has shown remarkable momentum in the shorter term. The stock has jumped 73% in the last six months, 43% in three months, and 56% in just one month, reflecting growing investor interest.
