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HomeStocksAshish Chugh: Micro-cap Stock Skyrockets with a 20% Upper Circuit

Ashish Chugh: Micro-cap Stock Skyrockets with a 20% Upper Circuit

Indian benchmark indices opened the Tuesday session in negative terrain and as the day has progressed selling pressure has extended with Nifty and Sensex down by 0.51% and 0.40%, respectively. Though the frontline indices are exhibiting weakness, the broader market indices have started the month of October on a strong footing and were seen relatively outperforming the frontline indices. The Nifty Mid-cap 100 and Small-cap 100 is up by 0.14% and 0.52%, respectively.

Amid the buoyancy in the broader markets one stock which is hogging the limelight is Kothari Fermentation & Biochem Ltd (KFBL). 

The stock is locked at an upper circuit of 20% up by Rs 14.70 at Rs 88.20. On Tuesday, the stock registered a fresh 52-week high of Rs 88.20. The key catalyst behind the strong up-move in the stock is renowned micro-cap investor Ashish Chugh, known for his acumen to spot hidden gems at an early stage purchased 1,00,000 shares of the stock at an average price of Rs 67.03.

Kothari Fermentation & Biochem Ltd (KFBL), incorporated in 1990, is promoted by Moti Lal Kothari and Pramod Kothari. The company produces yeast and its derivatives at its plant in Sikandrabad, Uttar Pradesh, which has an installed capacity of 2,000 tonnes per month. 

In the month of July, there was an interesting development as Israeli foodtech company Nextferm & Kothari Fermentation teamed up to manufacture fermented vegan protein. 

Demand for meat alternatives is high, with today’s consumers increasingly keen to reduce their carbon footprints and reap the health benefits associated with decreased meat consumption. The market for meat alternatives looks set to grow exponentially to USD 17.4 billion by 2027 and expansion into the plant-based market is a good opportunity for many manufacturers. 

In their partnership, Nextferm will invest USD 2 million for the production setup in India, which will be ready for production later this year. 

The production setup that will be established in India will allow us to meet the growing demand for ProteVin, with a lower investment than planned with the ability to increase future capacity.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. 
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