Penny Stock Under Rs 1 Raises Funds of Up to Rs 50 Cr Via A Private Placement of Secured NCDs

The small-cap, non banking financial company Standard Capital Markets Ltd. (NBFC) revealed on Friday that its board sanctioned the issuance of 5,000 unrated, unlisted, secured Non-Convertible Debentures (NCDs) on a private placement basis. Each NCD has a face value of Rs 1,00,000, bringing the total to Rs 50 crore. This initiative strategically supports the company's efforts to solidify its funding base while seeking new avenues for growth.

This capital increase occurs only weeks after the company's board approved its venture into the Alternate Investment Fund (AIF) business. The NBFC's wholly owned subsidiary, Standard Capital Advisors, will act as the investment manager for this AIF, controlling assets as well as investment strategies. The firm had set aside an amount of Rs 50 crores towards the establishment of the AIF, indicating a shift from conventional lending operations.

In a securities filing, the firm disclosed, "The Board of Directors of the company, by decision taken through circulation dated May 2, 2025, has given consent to the allotment of 5,000 unrated, unlisted, secured NCDs at an issue price of Rs 1,00,000 each, totaling to Rs 50 crore, on a private placement basis." The funds are anticipated to strengthen the company's foothold in the market and offer increased competitive mobility to venture into new operations.

In spite of these changes, Standard Capital Markets' stock is still encountering considerable hardships in the marketplace. Shares as of May 2 closed at Re 0.42 apiece on the BSE, representing an 8.70% decline, along with a surge in trade volume. The floundering stock has now suffered a further 11% drop in the last five days, 23 per cent in the last month, and 58% since the beginning of 2025. This brings the total year-long decline to 78%, resulting in a market capitalization drop to Rs 72.66 crore.

Financial figures have been inconsistent. When looking at Q3FY25 results, net sales showed significant growth as they were recorded at Rs 20.28 crore compared to Rs 9.84 crore in Q2FY25. Still, there was a clear operational loss as net loss surged in Q3FY25 to Rs 45.10 crore versus Rs 0.70 crore loss in the previous quarter. Over nine months of FY25, net sales stood at Rs 38.16 crore while net loss surged to Rs 44.05 crore. In FY24, the recorded values of net sales and net losses stood at Rs 27.39 crore and Rs 10.71 crore, respectively.

Established in 1987 and licensed in India as of April 1995, Standard Capital Markets Ltd. focuses on financial services such as insurance, legal arbitration, and investment advice, along with lending to individuals as well as SMEs. Standard Capital Advisors signalled a shift in Standard Capital's growth strategy by changing to alternative investments and also setting the base for new revenue streams.

While still worrying about headwinds, deploying capital from the latest NCD issuance and AIF venture will directly have a lasting impact on future company performance and rally investor confidence.