IT Stock Rises 4.6% As Board Approves FCCB Conversion And Proposes 1:5 Stock Split

The global IT services company Kellton Tech Solutions Limited saw a remarkable rise in its shares. Kellton Tech shares rose 4.62% and closed at Rs 134.65 on July 4, 2025, which was an increase from the previous day's closing price of Rs 128.71. While the stock remains below its 52-week high of Rs 184.30, there is noteworthy investor interest as it has traded 42% above its 52-week low of Rs 95.01.

The company's most recent announcement regarding the consolidation of shares, along with the FCCB partial conversion seems to be a contributing factor to the stock surge.

Kellton Tech's regulatory filing confirmed the Security Issuance Committee's decision to issue 11,26,580 equity shares with a face value of Rs 5 on July 4, 2025. These equity shares were received for FCCB conversions at an issue price of Rs 106/share. This includes a payment of Rs 101/share over the face value which serves as a premium. Post issuance, the company's paid-up equity share capital rose from Rs 48.75 crore comprising 9,75,13,934 shares to Rs 49.32 crore with 9,86,40,514 shares.

The new shares issued will have the same rank as the pre-existing shares, effective from the allotment date. The company had received, along with the conversion, in-principle approval from both BSE and NSE on February 20, 2025.

Moreover, the Board of Directors has issued a recommendation for a 1:5 stock split where an equity share of Rs 5 face value will be subdivided into five shares of Re 1 face value. The primary goal of the stock split is to enhance share liquidity and to enable retail investors to purchase the stock more easily. It is expected that the company will need shareholder and regulatory approval but will be able to complete the process in three months from receiving approval.

These changes come after a robust financial performance for FY25. Kellton Tech registered a year-on-year increase in annual net sales of 11.7 per cent to Rs 1,098 crore. The net profit also rose significantly by 23.4 per cent to Rs 80 crore. The company reported that the growth was driven by their strategic shifts in artificial intelligence (AI), digital transformation, and the addition of nine new clients in the last quarter.

For the Q4FY25, Kellton Tech's net sales amounted to Rs 286 crore, with a net profit of Rs 19 crore, remaining profitable and reflecting strong growth momentum.

As of March 2025, the company's promoters have a 40.82 per cent stake. Kellton Tech is trading at a 15x P/E ratio, which is less than the industry average of 28x, suggesting some room for growth in valuation.

Kellton Tech's market capitalization and share price soared 798%, bringing the company's total value to over Rs 1,300 crore in just five years.

Kellton Tech is a global technology consulting and IT service provider founded with the vision of exploring "Infinite Possibilities with Technology". With a workforce of over 1,800 employees, the company serves clients from the USA, Europe, India, and Asia Pacific. Kellton Tech has also featured four times on the Deloitte Technology Fast 50 India List and was named by Forbes Asia as one of the Top 200 "Best Under a Billion" companies.