A2Z Infra

This company had issued shares during the IPO at Rs.400/share and today it is quoted at an unbelievable Rs.10 and its 52-week high stands at Rs.85.80. One might think that it’s a typo error and feel the need to relook at the price but it is indeed true; an over 97% loss. And talking about loss, the company has maintained its track record of losses and for Q4FY13, it posted a loss of Rs.51 crore, which is almost as much as the loss of Rs.54 crore it posted for FY13. Sequentially, there has been a 76% rise in net loss. On a net revenue of Rs.78 crore, its operating cost was at Rs.112 crore and interest outgo was at Rs.22 crore and for FY13, it stood at a staggering Rs.87 crore. Its interest outgo is eating away over 29% of the net revenue.

The company has stated that it is facing liquidity issues due to delayed realization of receivables and delay in the commencement of commercial production at its biomass based power plants. The company has since then made an application for CDR. Fundamentals apart, what really irks about the company is that its promoters. Despite having consistent losses, tight liquidity issues and this major loss which its shareholders are being forced to incur, the remuneration paid to directors for FY13 and Q1FY14 has exceeded the prescribed limits under Companies Act. The company has now applied to the central Govt for seeking approval of excess remuneration paid. When the company had gone public, the main attraction in the company was the fact that Rakesh Jhunjhunwala had invested. He held 21.03% stake pre IPO, was an investor in the company since 2006, and was among the group of investors who sold part of their holding when the firm floated its public issue. He had earlier made around 2 times on his part exit. In Oct’12, he had resigned from the board but he still holds 18.02%stake in the company.