Shares of a large-cap company that manufactures industrial gases gained nearly 4 percent on Monday’s early trades to reach an intraday high of ₹ 6139.95 apiece on the National Stock Exchange (NSE) after it was awarded a letter of acceptance (LOA) by Steel Authority of India (SAIL).
Linde India, in an exchange filing, informed the bourses that it has been awarded an LOA from SAIL for the installation of 1000 tonnes per day Cryogenic Oxygen Plant. This project has been received on a Construct, Operate and Maintain (COM) basis for a period of 20 years from the date of commissioning of the plant and ancillary facilities. Moreover, it has a provision of renewal for a further period of 5 years on a mutual agreement basis at SAIL’s plant situated at Rourkela.
Linde India, a subsidiary of BOC Group, UK (75 percent stake), is primarily engaged in the manufacture of industrial and medical gases and the construction of cryogenic and non-cryogenic air separation plants.
With a market capitalization of ₹ 50,452 crores, Linde India is a large-cap company. It has an ideal return on equity of 20.50 percent and an ideal debt-to-equity ratio of 0.01. Its shares were trading at a price-to-earnings ratio (P/E) of 126.11, which is significantly higher than the industry P/E of 16.99, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 75.00 percent stake in it, followed by retail investors with 14.41 percent, mutual funds with 7.28 percent, foreign institutions with 2.85 percent and other domestic institutions with 0.46 percent.
In the past ten months, the company’s share price has increased by 109 percent from ₹ 2,933.00 to ₹ 6,139.95 apiece, delivering multibagger returns. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares ten months ago, the value of their holdings would have been ₹ 2.09 lakhs today!
Written by Simran Bafna
