BUY AT EVERY FALL and EVERY FALL RISE - MBL Infrastructures Ltd | Investing | Finance | Advise | Stocks | Share Guru

30/11/2017 11:11:20
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Q: Is MBL Infrastructures Ltd a worth buy at the current market price (Rs 25-26; BSE Code: 533152)?

A: MBL Infra operates in Road Construction sector. Unexpectedly, it had to face a debt crisis. It all began with it failed to pay on time the loan instalments to RBL Bank.

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As per the Insolvency and Bankruptcy Code, RBL approached NCLT by asking to wind up the company. MBL stock that traded at Rs 228 in Jan 2016 has lost its value from then onwards and fell down to a low of Rs 22, one-tenth of the earlier high-price. As per IB Code, the debt has to be settled by Dec 23, 2017. At this juncture, when the deadline is approaching fast, the consortium of lenders agreed, in principle to a settlement. Accordingly, the consortium will restructure the Rs 1,700 crore debt of MBL Infra. In return, the promoter Anjani Kumar Lakhotia will provide the company Rs 120 crore as long-term funds. The consortium that consists of PNB, RBL Bank and others under the leadership of SBI will give its consent officially by Dec 23 deadline. MBL Infra will mobilise the Rs 120 crore funds by selling its stakes in subsidiaries.

Though the infrastructure company could earn profits until 2015-16, it suffered a net loss of Rs 65.97 crore in the following year 2016-17. However, it could reduce the net loss of Rs 122.79 crore in the quarter of Sep 2016 to Rs 16.46 crore in Q2FY18. MBL Infra is going to regain its past glory.

Those who bought the stock at high price must re-invest in it to reduce their acquisition cost. It is the right time to buy MBL Infra. If you miss it now, you may not get the opportunity in future to wipe out past losses on the share and bring your portfolio back on track. The stock must be considered for accumulation at every stage from now onwards with a long-term outlook.      

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