1:2 Rights Issue: Penny Stock Below Rs 20 Hit 10 Per Cent Upper Circuit with Heavy Volume on 5 Major Updates
The stock is up by 85 per cent from its 52-week low of Rs 10.11 per share.
On Friday, shares of Himalaya Food International Ltd hit a 10 per cent upper circuit to Rs 18.67 per share from its previous closing of Rs 16.98 per share with a 6.4 times spurt in volume on the BSE. The stock’s 52-week high is Rs 28.29 per share and its 52-week low is Rs 10.11 per share.
The sudden rise in the stock price was due to 5 major updates. They are as below:
1) Revival of Key U.S. Retail Customer - Dollar Tree
The Company has successfully revived its long-standing relationship with Dollar Tree, a major U.S. retail chain and key customer for over a decade. This account had gone dormant following the unfortunate fire incident at our Gujarat plant in May 2022. Dollar Tree remained an active buyer even during the COVID-19 period and is now back on board after a three-year gap. With the retailer expanding its footprint post-reorganisation, larger volumes are anticipated going forward, contributing significantly to our export revenue.
2) Strategic Five-Year MOU with U.S. Food Processor Cooperative
The Company has signed a Five-Year Memorandum of Understanding (MOU) with the Food Processor Cooperative of the United States. Under this partnership, Himalya Food will manufacture a breakfast range of frozen products tailored specifically for the U.S. food service sector. This initiative is expected to offer both immediate and long-term financial benefits, creating a recurring revenue stream and enhancing plant utilisation.
3) Bulk Export Orders for French Fries
The Company has received a bulk order for French Fries from a major US-based food service distributor. The products are bulk-packed in 30-lb food service packaging. Five containers are scheduled to be shipped by next week, marking a strong start to our French Fry exports. We have contracted the production with a quality manufacturer in Gujarat under our quality control till our French Fry line goes into production later this year.
4) French Fry Plant Completion Update
Construction of the new French Fry production line (54,000 MT per annum) is in progress. The plant is expected to be fully operational by October 2025, further boosting production capacity and export potential.
5) Favourable judgement in Income Tax Appeals
In a significant victory, the Income Tax Appellate Tribunal (ITAT) ruled in the Company's favour, dismissing the Income Tax Department's attempt to add Rs 119.27 crore to its taxable income for Assessment Years 2013-14 and 2014-15. Key aspects of the ruling include the recognition of mushroom cultivation income as exempt agricultural income and the acceptance of claims under Section 35AD for investments in integrated cold chain infrastructure.
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About the Company
Himalaya Food International Ltd, founded in 1992 and operating from two ISO 22000-certified facilities in India, is a frozen and canned food processor specialising in mushrooms and IQF ready-to-eat products. Under the "Himalaya Fresh" brand, they cultivate mushrooms and manufacture a variety of natural, vegetarian items, including cheese, sweets, and appetisers, which are exported to the USA and sold domestically, utilising quick chilling and freezing to preserve quality.
Himalaya Food International Limited approved a rights issue. This involves 2,89,36,442 equity shares at Rs 13.80 each (including a Rs 3.80 premium), totalling up to Rs 39,93,22,900. The Record Date is May 23, 2025, with the issue opening on June 03, 2025, and closing on June 18, 2025. Prior to the issue, there were 5,78,72,884 shares, increasing to 8,68,09,326 post-issue. Shares are offered in a 1-for-2 ratio, and the issue will not exceed 30 days. The ISIN for Rights Entitlement is INE552B01010.
The company has a market cap of over Rs 100 crore with a low PE of 18x whereas the industry PE is 34x. The stock is up by 85 per cent from its 52-week low of Rs 10.11 per share.
Disclaimer: The article is for informational purposes only and not investment advice.