NBFC Penny Stock Below Rs 5 Hit Upper Circuit Ahead of 1:2 Stock Split Allotment

Srestha Finvest, a non-banking financial company (NBFC), witnessed a notable surge in its stock price today. This multibagger penny stock, available for trade exclusively on the Bombay Stock Exchange (BSE), closed at Rs. 2.07, up 3.50% from its previous close of Rs. 2.00. The company, which currently has a market capitalization of Rs. 168.92 crores, has seen a consistent upward trend in its stock price over the past year.

Over the last year, Srestha Finvest's stock has risen significantly, reflecting a nearly 50% increase from Rs. 1.38 to Rs. 2.07 per share. The past six months have been particularly impressive, with the share price climbing approximately 72.5% from Rs. 1.20 to Rs. 2.07. Year-to-date, the stock has delivered returns of nearly 60%, underscoring its appeal to investors seeking high-growth opportunities in the small-cap space.

The stock's 52-week range illustrates its volatility, with a high of Rs. 2.56 and a low of Rs. 0.98. Despite its status as a penny stock, Srestha Finvest's performance has caught the attention of investors, making it a notable player in the NBFC sector.

Srestha Finvest's financial results for the quarter ending June 2024 highlight the company's strong growth trajectory. The NBFC reported standalone net sales of Rs. 39.50 crore, marking a staggering 1633.98% increase from Rs. 2.28 crore in the same quarter the previous year. Net profit also saw a significant rise, reaching Rs. 31.01 crore, up 6962.92% from Rs. 0.44 crore in June 2023.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew to Rs. 38.09 crore, a 2389.54% increase from Rs. 1.53 crore in the previous year. Additionally, earnings per share (EPS) rose to Rs. 0.53 from a mere Rs. 0.01, reflecting the company's enhanced profitability.

In a move to strengthen its financial position, Srestha Finvest recently announced plans to raise funds through the issuance of equity shares. The company aims to raise up to Rs. 200 crore through Qualified Institutional Placement (QIP), a method that allows listed companies to issue shares or debentures to a select group of institutional investors, known as Qualified Institutional Buyers (QIBs). This fundraising initiative is expected to bolster the company's capital base, supporting its growth and expansion plans.

Another significant development for Srestha Finvest is the approval of a stock split in a 1:2 ratio. This means that for every share held, shareholders will receive two shares, effectively reducing the stock's price while increasing the number of shares available in the market. The record date for the stock split will be announced later. This is the second time Srestha Finvest has opted for a stock split, the first being in October 2016, when it executed a 1:5 split.

Headquartered in Chennai, Tamil Nadu, Srestha Finvest Limited operates as a Category 'B' NBFC, registered with the Reserve Bank of India. The company specializes in lending against securities, movable and immovable properties, as well as offering finance, hire purchase, and leasing services. Notably, Srestha Finvest does not accept public deposits and operates without any subsidiary companies. Its shares are listed on both the Bombay Stock Exchange Limited and the Metropolitan Stock Exchange of India Ltd.