2:1 Bonus Share & 1:10 Stock Split: Multibagger penny stock below Rs 2 hit upper circuit on business expansion & acquisition; details inside!

From Rs 0.04 to Rs 1.69 per cent, the stock gave multibagger returns of 4,125 per cent in 3 years.

Today, shares of Standard Capital Markets Limited hit a 5 per cent upper circuit to Rs 1.69 per share from its previous closing of Rs 1.61. The stock’s 52-week is Rs 3.52 and its 52-week low is Rs 1.15.

In a move to expand its business, Standard Capital Markets Limited (SCML) has acquired a 100 per cent stake in KRV Brooms Private Limited. KRV Brooms, a manufacturer and supplier of housekeeping items like brooms, mops, and cleaning brushes, had a turnover of Rs 90,74,496 for the financial year ending March 31, 2023. Interestingly, this acquisition is classified as a related party transaction as Mr Ram Gopal Jindal, a promoter of SCML, held a 99.9 per cent stake in KRV Brooms beforehand. However, SCML assures that the deal was conducted at arm's length and did not require shareholder approval due to its immaterial significance.

The acquisition is expected to be completed by April 30, 2024, with SCML paying Rs 1,00,000 in cash for the 10,000 shares of KRV Brooms, priced at Rs 10 per share. This move effectively makes KRV Brooms a wholly-owned subsidiary of SCML. KRV Brooms itself was incorporated in India on January 18, 2022, and this acquisition signifies SCML's diversification into the manufacturing and supply of housekeeping products.

Established in 1987, Standard Capital Markets Ltd is a NBFC company registered with the RBI. They offer a variety of financial services including advisory (negotiations, project identification etc.), arbitration & mediation, due diligence, commercial contract services (drafting agreements etc.), litigation assistance, and even licensing (company incorporation, import/export licenses etc.). With a strong track record and recent 100 per cent CAGR profit growth over the last 5 years, they've established a wholly-owned subsidiary, Standard Capital Advisors Limited, to expand their reach into merchant banking activities.

According to Quarterly Results, the net sales increased by 94.4 per cent to Rs 5.78 crore, operating profit increased by 243.7 per cent and net profit increased by 647.8 per cent to Rs 3.32 crore in Q3FY24 compared to Q3FY23 while the net sales increased by 272.2 per cent to Rs 16.70 crore and net profit increased by 1,203 per cent to Rs 8.20 crore in 9MFY24 compared to 9MFY23. 

In its half-yearly results (H1FY24), the net sales surged 426 per cent to Rs 10.92 crore and net profit leapt 2,560 per cent to Rs 4.90 crore, year-over-year. The impressive trend extended to FY23, where net sales jumped 2,093 per cent to Rs 8.05 crore and net profit galloped 2,584 per cent to Rs 2.23 crore, compared to FY22.

The shares of the company undergo a 2:1 bonus share and stock split from Rs 10 to Rs 1 on the ex-date i.e., December 29, 2023. According to the shareholding pattern, promoters of the company only own a 17.81 per cent stake while an 82.19 per cent stake is owned by the public. From Rs 0.04 to Rs 1.69 per cent, the stock gave multibagger returns of 4,125 per cent in 3 years.

Disclaimer: The article is for informational purposes only and not investment advice.