Agriculture stock hits 5% upper circuit after Hong Kong based FII to acquire 24% stake at 138% premium

Synopsis: Auri Grow India hit 5% upper circuit at ₹0.87 after a Hong Kong FII moved to acquire 24% at ₹2 per share, signalling strong premium-backed growth expectations.

This company specializing in agriculture and agri-technology is drawing foreign investor attention. Hong Kong-based Luminary Crown Ltd has expressed interest in acquiring a 24% stake at a significantly higher price than the trading price. The potential deal could unlock strategic collaborations in rice exports, modern farming technologies, and organic agriculture, with the board set to review the proposal later this month.

Auri Grow India Limited‘s stock, with a market capitalisation of Rs. 128.4 crores, rose to Rs. 0.87, hitting the intraday upper circuit, up 5 percent from its previous closing price of Rs. 0.83. Furthermore, the stock over the past year has given a return of 50 percent.

Foreign Investment Details

Luminary Crown Ltd proposes acquiring the stake through preferential allotment of new shares. This primary issuance route requires multiple regulatory clearances before execution. The company must obtain approvals from SEBI, shareholders, and other statutory authorities.

The proposed investment values Auri Grow significantly higher than market price. Trading at Rs. 0.84 per share on December 16, the Rs. 2 offer represents a 138% premium. This valuation gap indicates strong confidence in the company’s growth trajectory.

Additionally, the FII has requested board representation through one nominated director. However, these governance rights remain limited to minority investor protection only. The arrangement ensures no change in management control of Auri Grow India.

Mr. Pratik Kumar Patel, Director at Auri Grow India, emphasized the preliminary nature of discussions. He clarified that no definitive agreements have been signed yet. The company will comply with SEBI disclosure regulations as developments unfold.

Expansion into Rice Processing and Exports

The collaboration roadmap includes ambitious plans for rice aggregation and processing operations. Luminary Crown wants to help Auri Grow expand into GCC and European markets. This export-focused strategy leverages India’s strong position in global rice trade.

The partnership aims to build a scalable agri-business platform with international reach. Rice processing and export operations could open new revenue streams for the company. Moreover, focusing on premium markets ensures better margins and sustainable growth.

The strategic alignment fits well with India’s agricultural export capabilities. GCC countries represent a major market for Indian rice and food products. European markets offer opportunities for premium and specialty rice varieties.

This initiative could position Auri Grow as a significant player in agri-exports. The collaboration brings together local agricultural knowledge and international market access.

Advanced Farming Technologies and Project Economics

Luminary Crown has proposed leading a major hydroponics and aeroponics farming project. This technology-driven initiative aligns with sustainable agricultural practices gaining global traction. The project requires an estimated investment of Rs. 55 crores.

The proposed farming project targets impressive financial returns once operational. Annual revenue potential ranges between Rs. 180-200 crores from these operations. Net margins could reach approximately 13%, though actual results depend on execution quality.

Hydroponics and aeroponics represent the future of controlled-environment agriculture. These methods use significantly less water and land compared to traditional farming. They also enable year-round production independent of seasonal variations.

Furthermore, the LoI includes plans for organic farming on company-owned land. This arrangement spans a minimum five-year tenure with terms to be negotiated. Organic farming operations would diversify the company’s agricultural portfolio significantly.

Financial Performance

Auri Grow India has delivered remarkable financial growth in recent periods. The company reported sales of Rs. 175.55 crore in FY24-25. This represents a tenfold jump from Rs. 16.76 crore in FY23-24.

Profitability has improved dramatically alongside revenue growth during this period. Net profit reached Rs. 7.17 crore in FY25, up from just Rs. 51 lakh previously. This 14-fold increase in bottom line demonstrates improving operational efficiency.

The strong financial performance likely attracted foreign institutional investor interest. Consistent growth and profitability make the company an attractive investment proposition. These numbers validate the management’s strategic transformation into agri-technology and exports.

The board meeting scheduled for December 26 will be crucial for shareholders. Market participants will watch closely for official announcements regarding the proposal. Any formal agreement could significantly impact the company’s valuation and future trajectory.

Written By Fazal Ul Vahab C H

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