Agio Paper & Industries Ltd is apparently a paper manufacturing company based in Bilaspur. However, for the past four years, the company has made no sales at all. Its reserves are negative Rs21.33 crore, for FY16-17. While the company has no business, the share capital rose to Rs30.62 crore for FY15-16, from Rs16.13 crore in FY14-15, and jumped to Rs41.81 crore for FY16-17. The money from share issue is probably being used to reduce the company’s borrowings. In July 2017, the company has made a change in its articles of association to increase the authorised capital to Rs66.49 crore. Why does Agio need more capital?
The management, in its FY16-17 annual report said, “The paper plant was closed on 6th October, 2010 to ensure due compliance of orders of the Central Pollution Control Board during which the expansion unit was still under the installation stage. As a result of the closure, the installation of the paper machine and the integration of the power plant with the old and new machines could not be carried out. In order to be effective as well as feasible both needs to operate in unison but since circumstances has led to non-commissioning of the power plant and the new paper machine both of them have been shown as work in progress (Rs35.83 crore since FY10-11) in auditor’s report.” Even with no business, the stock rose by 338% in one year, from Rs1.12 on 20 July 2016 to Rs4.9 on 11 July 2017. Why? Will the regulator make some effort to find out?
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