4350% Returns In 3 Years: Dividend Paying Multibagger Penny Stock Slips, Forays Into Insurance Broking

Standard Capital Markets, a non-banking financial company (NBFC), has announced plans to expand its business horizon by venturing into the insurance broking domain. In a recent corporate announcement on the Bombay Stock Exchange (BSE), the company disclosed its decision to initiate operations in the insurance broking sector through the establishment of a subsidiary entity.

According to the statement released by the company's board, the subsidiary, tentatively named 'Standard Insurance Broking Limited,' is set to be incorporated to facilitate its foray into the insurance broking market. The proposed subsidiary aims to operate as a direct broker under the purview of the Insurance Regulatory and Development Authority of India (IRDAI), adhering to the regulatory framework outlined in the Insurance Brokers Regulations of 2018.

Highlighting the company's progress in obtaining regulatory approvals, the statement confirmed that Standard Capital Markets has secured a No Objection Certificate (NOC) from the IRDAI. Furthermore, the company expressed its intention to obtain the necessary Insurance Broking License following the subsidiary's incorporation.

With an authorized capital of Rs 1 crore, the subsidiary will primarily engage in insurance broking activities, leveraging Standard Capital Markets' extensive expertise in the financial sector. Standard Capital Markets is poised to retain a 75% stake in the newly formed entity.

In a parallel development, the company's board ratified the appointment of Virender Kumar & Associates as the Secretarial Auditor, effective immediately. This move underscores the company's emphasis on maintaining transparency and regulatory compliance in its operations.

The latest initiative to enter the insurance broking domain follows Standard Capital Markets' recent acquisition milestone. In March, the NBFC had finalized the acquisition of a 100% stake in KRV Brooms Private Limited, subsequently integrating it as a Wholly Owned Subsidiary. This move signifies the company's proactive approach towards expanding its portfolio and enhancing its market presence.

Investors in Standard Capital Markets have their eyes on the calendar as the company tweaks its dividend distribution schedule, impacting shareholder eligibility for the upcoming payout. This alteration, disclosed in a regulatory filing dated May 2, has sparked attention in the financial markets.

Standard Capital Markets announced its last face value split and bonus announcement in 2023. The company, which split the face value of its shares from Rs 10 to Rs 1 in 2023, has been trading on an ex-split basis since December 29, 2023. Similarly, its last bonus announcement in 2023, in the ratio of 2:1, saw the shares trading ex-bonus from the same date.

Standard Capital Markets, with a face value of Re 1 per share, previously declared a dividend of 1% per share, equivalent to 1 paisa per share, as stated in an earlier regulatory filing. Dividends serve as a token of appreciation for their investments. Typically distributed in cash from the company's profits, dividends hold significance for investors seeking returns on their holdings.

However, a recent filing has brought a slight adjustment to the timeline. The record date, pivotal in determining dividend eligibility for shareholders, has been rescheduled to May 13, shifting from its original date of May 10. This modification underscores the company's adherence to regulatory procedures and its commitment to maintaining transparency in its dealings.

Despite the adjustment, the shares of Standard Capital Markets were observed trading with marginal declines of nearly 1% at Rs 1.78 per share as of 2:55 pm on the Bombay Stock Exchange (BSE). Despite its classification as a microcap stock, Standard Capital Markets has displayed remarkable growth, boasting a market capitalization of Rs 308 crore. Over the past three years, it has delivered impressive multibagger returns of 4350%, attracting investor interest and market attention.

It's worth noting that Standard Capital Markets operates under the regulatory purview of the Reserve Bank of India as a Non-Banking Financial Company (NBFC), subject to additional oversight and compliance measures. This regulatory framework adds assurance for investors and underscores the company's focus on maintaining regulatory standards in its operations.