FII Backed Penny Stock Below Rs 3 Hit 5% Upper Circuit On Rs 50 Cr Rights Issue Plan

A microcap company operating in the financial services industry is Advik Capital Ltd. The company is one of the emerging non-deposit-taking non-banking finance companies (NBFCs) authorised by the Reserve Bank of India to grant gold loans. The stock hit the 5% upper circuit limit of Rs 2.45 during the early trading today on the BSE after the business announced plans to raise funds.

The company said in a stock exchange filing that "The meeting of the Board of Directors of the Company is scheduled to be held on Saturday, September 02, 2023 to decide the various matters relating to the Rights Issue including terms and conditions such as the determination of the Rights Issue price and related payment mechanism, Rights Issue size, Rights Entitlement Ratio and other matters incidental or connected therewith. "

"Pursuant to the approval of Board of Directors of the Company on April 11, 2023 and subsequent shareholder approval obtained through postal ballot on May 18, 2023 for company's proposed fund-raising program of up to Rs. 50 Crore in total, including the issue of fully paid-up equity shares of the Company of face value of Rs. 1/- each ("Equity Shares") by way of a rights issue ("Rights Issue") not exceeding Rs. 50 Crores (Rupees Fifty Crores) in single trench, in accordance with the Companies Act, 2013 and the rules made thereunder, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended and other applicable laws. The Draft Letter of Offer for Right Issue dated July 18, 2023 of not exceeding Rs. 50 Crore was filed with the Stock Exchange, where the securities of the Company are listed i.e., BSE Limited, to seek their In Principal Approval," said Advik Capital in a regulatory filing.

The company's net sales reached Rs 152.70 crore in June 2023 quarter, up 39.44% from Rs. 109.51 crore in June 2022 quarter. The net profit was Rs. 0.64 crore in the first quarter of FY24, down 33.47% from Rs. 0.96 crore in the same quarter of FY23, while the EBITDA was Rs. 2.66 crore, up 78.52% from Rs. 1.49 crore. Advik Capital's earnings per share (EPS) dropped from Rs. 0.05 in Q1FY23 to Rs. 0.03 in Q1FY24.

The stock made a 52-week-high of Rs 5.16 on (09/03/2023) and a 52-week-low of Rs 1.96 on (14/08/2023). During Q1FY24, the company recorded promoters shareholding of 21.80%, FIIs stake of 0.76% and public stake of 77.45%.