SME company gains 15 times on stock market within one year

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By S Jha

New Delhi, October 7: The SME platform for the listing of the IPOs is buzzing, with some of the small and medium enterprises giving multiple returns even while the broader stock market has been jittery.

The share of this company marine company had been trading at about Rs 48 a share in October last year, and now in just 12 months it has zoomed to Rs 700 a piece, giving almost 15 times return.

The SME platform is, however, witnessing the high net worth individuals taking ride on such small size companies since the cost of applying for the IPO is huge at Rs two lakh. The small and low-capital base investors stay away from such IPOs, which are giving mind-boggling returns.

The BSE has the SME platform on which such scrips trade after their listing. However, astronomical returns given by some of the companies may not rule out the role of the manipulators, who with a large base of capital can manipulate the prices in quick times.

This marine company is trading on the SME platform on BSE. It is in the business of marine crafts. The company also owns them and also takes up repair and maintenance works for others. The nature of business may make on hard to believe that it could give a 15-time return in less than one year.

But Knowledge Marine & Engineering Works (KMEW) is the company which has given stellar returns within a year. In October, 2021, the scrip of KMEW was trading at Rs 48 a share. On Friday, the scrip touched Rs 700 a piece, giving 1328 per cent returns.

The financials of the company suggest that it’s on a strong growth path. The Return On Capital Employed (ROCE), one of the indicators to assess the financial health of a company shows KMEW in strong territory. Its ROCE is 51.8 per cent. The Return On Equity (ROE), another key indicator, is 54.8 per cent.

Sales of the company zoomed to Rs 42 crores in the June quarter this year against Rs 19 crores in the previous quarter. The net profit also rose to Rs 16 crores against Rs 5 crores in the previous quarter.

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