Stock with work orders in Lakshadweep, Ayodhya has zoomed 91% in 15 days

The stock of Praveg hit a new high of Rs 1,210 and was trading higher for the third straight day, having rallied 46% during this period

Shares of Praveg (formerly Praveg Communications) surged 19 per cent to hit a new high of Rs 1,210 on the BSE in Tuesday’s intra-day trade.

The company was in the spotlight due to its work orders from Lakshadweep island in the wake of India's ongoing travel row with Maldives, with growing calls to support local beach tourism. 

The stock was trading higher for the third straight day, recording a 46 per cent jump during this period. In the past 15 sessions, it has zoomed 91 per cent.

The average trading volumes on the counter more than doubled today. Till 01:24 PM; as many as 964,000 equity shares or 4.22 per cent of total equity changed hands on the BSE. 

Praveg is principally engaged in the business of providing services of advertising, hospitality, management and organization of events and exhibitions.

The company last month on December 19 received a work order from Lakshwadeep's department of tourism to operate and manage at least 50 tents at Agatti Island in Lakshwadeep. 

The order includes setting up a Cloak Room, Changing Room and activities like Scuba Diving, Destination wedding, corporate functions and many more facilities.

The order is for a period of three years that could be extended up to another two years. 

Earlier on November 17, Praveg announced the opening of its two properties namely Praveg’s Tent City at Ayodhya, UP and Beach Resort at Ghoghla Beach, Diu. 

Situated along Bramha Kund at Ayodhya, Praveg’s ultra luxury tent city has a capacity of 30 tents with one restaurant.

It is anticipated that the opening of Tent City at Ayodhya will witness a 10 to 15 per cent increase in tourism.

There is already a rush among travel agents and devotees to book rooms in advance for the consecration ceremony of Lord Rama’s idol at Ram Janmabhoomi, the company said. 

On December 26, 2023, Praveg’s board also approved fund raising by issuance of 1.49 million equity shares to Tata Mutual Fund (MF) and Kotak Mahindra Life Insurance Company on a preferential basis.

The company’s board approved issuance of 525,000 equity shares to Tata MF through one or more of its schemes.

An allotment of 300,000 equity shares was approved to Kotak Mahindra Life Insurance company.

In a separate exchange filing on the same date, Praveg announced receiving a work order for Jalandhar House, Diu and Damanganga Circuit House, Silvassa.

The work order for both properties is for a period of seven years that could be extended up to another three years.

With the addition of these properties, Praveg will have 9 properties in operation and 12 under development. It aims to further add more eco-responsible luxury resorts across India. 

Meanwhile, the company’s management anticipated strong growth during the second half of the year. To reduce the impact of seasonal earnings fluctuations, Praveg is investing in resort and hotel properties that will remain operational around the year.

Looking ahead, the management anticipates the operational resorts to achieve occupancy rates between 40-45 per cent in the upcoming quarter, while generating an average daily room rate (ADR) of Rs 7,000 to Rs 9,000.

“With the anticipated growth of our Events and Exhibition sector, we foresee a powerful synergy that will propel our overall operations to new heights,” the management said while announcing Q2 results on November 9.

The growth trajectory of India's service sector, paralleled by an upswing in disposable incomes, is expected to translate into heightened demand for both corporate travel and leisure getaways, the company said.

As on November 22, 2023, Praveg had a total 22.8 million outstanding shares, of which the promoters held 54.53 per cent holding.

The remaining 45.47 per cent stakes are with individual shareholders (28.35 per cent), foreign portfolio investors (6.3 per cent) and non-resident Indians and bodies corporate (nearly 4 per cent each), as per the shareholding pattern data.