Mistaken identity with Musk’s Tesla is not the only problem for this penny stock

Mistaken identity with Musk’s Tesla is not the only problem for this penny stock
Source: IANS

  • Urja Global shares ran up 20% on Monday to ₹12.74 a share, on news that it received an order from Tesla.
  • However, the order was not from Elon Musk's Tesla, but a Delhi-based promoter's US subsidiary in the name of Tesla, tweeted ace investor Vijay Kedia.
  • Auditors have flagged off issues with the company, saying that ‘misstatements are material but not pervasive to the financial statements’.
It’s always easy come, easy go with penny stocks where the run up is sharp but also short-lived. That was the case with Urja Global which rallied on Monday based on a case of mistaken identity. In addition, the electric scooter and battery maker has had issues that were flagged off by auditors as recently as May.

The company’s auditors Uttam Abuwala Ghosh & Associates said in their report on the quarterly results that was shared with the exchanges that — the inability to obtain written representations from the management regarding various account balances, transactions, disclosures and certain assertions constituted a limitation on the scope of the audit.

“The company was unable to provide sufficient proofs and explanations with respect to various investment(s) made by it in different mines and projects,” the auditor said.

The auditors concluded that the misstatements are material but not pervasive to the financial statements.

“The opinion is subject to the fact that we did not have any access to the documents and data of the company for the previous financial year due to the GST raid in July 2022, where the department seized all the data of the company as informed by the management to us,” the auditor said.

The namesake & the confusion

On Monday, the stock of Urja Global shot up 20% after news came out that it received an order from Tesla to manufacture and supply batteries. But it was not from Elon Musk’s Tesla — but from a namesake – Tesla Power India Private Limited, under the Tesla Power USA brand, as per an announcement on NSE.

Market veteran Vijay Kedia burst the myth on Twitter. “I am thrilled to read news about a listed Indian company “tied up” with Tesla USA. I did some homework and found it's not Elon Musk's Tesla, it actually belongs to a Delhi-based promoter's USA subsidiary in the name of Tesla. Stock is in the upper circuit. Long live bull market,” he tweeted.

In spite of the current run up in the stock, on a one year-basis, its returns are flat. By the end of March it hit a low of ₹6 per share before recovering to the current price.