FII buying lifts infra stock 78% in a month, and by 23,000% over 5 years
return of foreign investors is a huge positive that could Indian stock markets to record levels. You see, the Indian stock market is very reliant on money coming in from domestic investors. But when foreign money also comes in, the double-effect could result in individual stocks shooting up in no time.
One such stock that has hogged the limelight these days is Hazoor Multi Projects. In merely a month, the company’s share price has shot up by a massive 78%. First a little background.
Hazoor Multi Projects was initially engaged in the construction of residential projects. During the pandemic, however, the company changed its line of business to infrastructure development. It currently works as a sub-contractor in executing various national highway road projects awarded by government authorities.
Coming to its recent rally, Hazoor Multi Projects recently informed the exchanges that it had allotted preferential shares to further accelerate growth in its business. In this preferential allotment, Mauritius-based foreign institutional investors also picked up stake in the company. Typically, FIIs buying into the counter could be due to various factors.
But in the case of Hazoor Multi Projects, it could be because the company is sitting on a heavy order book that provides strong revenue visibility for years to come. A good way to analyse a company’s growth prospects is to compare its order book with its current market capitalisation. A large order book relative to a smaller market cap may indicate undervaluation and strong future earnings, while the opposite scenario could signal overvaluation or operational inefficiencies.
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