Alok Industries shares jump around 16%, up for 3rd time this week; here's why

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Alok Industries rallied almost 16 percent in trade on Friday, spiking for the 3rd time this week, after Reliance Industries invested ₹3,300 crore in the company by subscribing to preferential shares. The stock jumped as much as 15.8 percent to its 52-week high of ₹31.45. Before this, it rose 7 percent on January 3 and hit its 20 percent upper circuit on January 2 (when the announcement was made).

However, it shed around 2 percent in the previous session, January 4. Just in the 5 sessions of January, the stock has soared 43 percent, extending gains for the 3rd straight month. It rose 8.6 percent in December 2023 and 13 percent in November 2023.

In the last 1 year, the stock has gained 74 percent and it has skyrocketed 212 percent from its 52-week low of ₹10.07, hit on February 22, 2023. In a regulatory filing on January 2, Alok Industries said it has allotted preference shares to RIL upon receipt of subscription money of ₹3,300 crore. The company’s board in November approved the issue of preference shares to Reliance Industries at a dividend rate of 9 percent on a private placement basis.

These preference shares will be redeemable at par at any time at the company’s option within a period not exceeding 20 years from the date of allotment, according to the company. Meanwhile, in the September quarter, Alok Industries reported a net loss of ₹175 crore, narrowing down from ₹192 crore loss in Q2FY23. The company's operating profit improved 200 percent sequentially to ₹36 crore in Q2FY24.

Established in 1986, Alok Industries is an integrated textile manufacturer headquartered in Mumbai. It has a strong presence in both the cotton and polyester segments. In the cotton segment, the company is integrated from spinning to weaving,