We first featured this company a month ago, during a deep dive into stocks trading below their book value—a trend that gained traction when the buzz around Elcid Investments’ boom was just hitting mainstream attention.
But why exactly did Mukul Agrawal choose to buy a stake in this company?
And what steps is the company taking to position itself for medium-term growth?
Let’s explore all this in today’s not-so-deep dive.
Who is Mukul Agrawal?
Mukul Agrawal is a well-known investor in India, celebrated for his knack for identifying promising microcap and small-cap stocks.
His investment strategy combines offence and defence: he adopts an aggressive approach backed by rigorous analysis while maintaining two separate portfolios—one for long-term investments and another for trading.
About the stock Mukul Agrawal bought
Autoriders International is a Mumbai-based company specializing in luxury car rental services. It offers chauffeur-driven rentals for individuals and institutions, along with local and international tour management services.
As of June, the company managed a fleet of 422 vehicles, ranging from hatchbacks and sedans to SUVs. Its operational network spans eight branch offices across major cities, including Ahmedabad, Bangalore, Delhi, Chennai, Hyderabad, Pune, Gurgaon, and Kolkata.
Here’s the intriguing part:
Over the past year (12-Dec-2023 to 12-Dec-2024), there were 250 trading sessions on the stock market. Yet, Autoriders International was permitted to trade on the exchanges for just 36 of those days.
This unusual trading pattern raises questions about its visibility and liquidity, even as the company gears up for growth.
The transaction
This share acquisition was part of a preferential equity share allotment conducted by the company at an issue price of ₹999 per share, involving only 11 select investors. Mukul Agrawal was one of them.
As per the company’s exchange filing, Agrawal invested over ₹6 crore to acquire 61,250 shares, translating to a 10.56% stake in Autoriders International.
Why did Agrawal invest in this micro-cap company?
As of 13 December, Autoriders International has a market capitalization of ₹8.5 crore. While the exact reasons behind Mukul Agrawal’s investment remain unclear, there are some plausible factors that might have influenced his decision:
Risk-reward equation: The company’s valuation appears attractive. Its latest book value stands at ₹745 per share, while the current market price is just ₹173. This reflects a price-to-book value (P/BV) multiple of 0.2x, indicating that the stock is trading at a significant discount relative to its book value—a potential opportunity for value investors.
Consistent earnings performance: Autoriders International has demonstrated consistent revenue growth, thanks to its strong ties with reputed customers. With recent expansions into new cities, the company is poised for faster growth, potentially enhancing its appeal to forward-looking investors like Agrawal.
Autoriders International aims to expand its fleet to over 500 vehicles by year-end, driven by strong traction from new customers and planned service expansions in tier-2 cities. The company’s management, with over 20 years of extensive experience, has built trust and credibility among its existing customer base—a positive signal for its growth prospects.
That said, investors should exercise caution and perform thorough due diligence on the company’s financials and corporate governance. Ensure the investment aligns with your financial goals and risk tolerance. It’s also worth noting that this transaction is unlikely to make a significant impact on Mukul Agrawal’s overall portfolio.
Stock performance
A year ago, shares of Autoriders International traded at ₹31.6. Fast forward to today, the stock trades at ₹173—delivering an astonishing 1-year return of over 450%.
The stock has also been consistently hitting upper circuits in recent trading sessions, signalling strong momentum in investor interest.
Here’s a table comparing Autoriders International with its peers:
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For a detailed analysis, check out Autoriders International’s financial factsheet.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
