Low PE high ROE multibagger penny stock below Rs 5; Board announced rights issue!

The stock gave multibagger returns of over 350 per cent in just 3 years whereas the BSE Sensex Index is up by 71 per cent.

Advik Capital Ltd informed that a meeting of the Board of Directors of the company has approved rights issue in the ratio of 17:18 i.e., 17 equity shares for every 18 equity shares held by the eligible equity shareholders of the company as on the record date with the right to renounce. The total number of securities proposed to be issued is up to 20,79,60,320 equity shares of face value of Rs 1 each for an amount aggregating up to Rs 4,991.04 lakh.

The rights issue record date is Thursday, September 07, 2023, and the issue price is Rs 2.40 per equity share (Including a premium of Rs 1.40 per share). The issue opening date is Monday, September 18, 2023, and the closing date is Friday, September 29, 2023.

On Monday, shares of Advik Capital Ltd were locked in a 5 per cent upper circuit to Rs 2.59 per share from its previous closing of Rs 2.47 per share. The stock’s 52-week high is Rs 5.16 and its 52-week low is Rs 1.96.

Advik Capital Ltd is in the business of financing, inter-corporate investments and capital market activities. The company has a market cap of Rs 57 crore and has delivered good profit growth of 149 per cent CAGR over the last 5 years. The company reported positive numbers in its Quarterly Results (Q1FY24) and annual results (FY23). The stock is trading at 0.92 times its book value.

The shares of the company have a PE of 5.75x whereas the industry PE is 24x and an ROE of 28 per cent. The stock gave multibagger returns of over 350 per cent in just 3 years whereas the BSE Sensex Index is up by 71 per cent. Investors should keep an eye on this micro-cap stock.

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