Multibagger penny stock below Rs 2: This micro-cap NBFC company incorporates a new subsidiary approved by Ministry of Corporate Affairs
From Rs 0.04 to Rs 1.84 per cent, the stock gave multibagger returns of 4,500 per cent in 3 years.
The Board of Directors of Standard Capital Markets Ltd, at a meeting held on May 8, 2024, approved two key decisions:
(1) incorporating a wholly-owned subsidiary named "Standard Insurance Broking Limited" (or an alternative name approved by authorities) to operate as a direct insurance broker under the regulations set by the Insurance Regulatory and Development Authority of India (IRDAI) and approved by Ministry of Corporate Affairs.
(2) Appointing M/s Virender Kumar & Associates as the company's Secretarial Auditor, effective immediately, based on the recommendation of the Audit Committee. The new subsidiary will have an authorized capital of Rs 1 crore divided into 10 lakh equity shares of Rs 10 each. While the industry type is insurance broking, the turnover is not applicable since the company is yet to be incorporated.
Standard Capital has already obtained a No Objection Certificate (NOC) from IRDAI and will pursue the Insurance Broking License after incorporation. Notably, the announcement mentions Standard Capital acquiring 75% per cent of the shares, but this might be a mistake as the subsidiary is being formed entirely by them.
Earlier, the company issued 26 crore new equity shares (face value Rs 1 each) at a corrected price of Rs 2.75 per share to convert outstanding unsecured loans of Rs 71.5 crore, primarily for Sunil Sales and Services Private Limited and Shark Suppliers Private Limited, subject to approval. This preferential issue coincides with a proposed increase in authorized share capital from Rs 150 crore to Rs 200 crore, allowing for the issuance of additional shares, and a special interim dividend of Rs 0.01 per share for the financial year 2023-24, with the record date for the dividend-adjusted to May 13, 2024.
Also Read: FII was allocated 3,25,00,000 shares on conversion of warrants into equity shares of this multibagger penny stock below Rs 20 with a Rs 2,326 crore order book!
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.
The company's financial performance has been on a steep upward trajectory. In Q3FY24, net sales shot up by 94.4 per cent to Rs 5.78 crore, operating profit rose 243.7 per cent and net profit skyrocketed 647.8 per cent to Rs 3.32 crore compared to Q3FY23. This strong performance continued throughout the first nine months of FY24 (9MFY24) with net sales increasing by 272.2 per cent to Rs 16.70 crore and net profit soaring 1,203 per cent to Rs 8.20 crore compared to 9MFY23.
Looking at the half-yearly results (H1FY24), net sales surged an impressive 426 per cent to Rs 10.92 crore, and net profit witnessed a phenomenal leap of 2,560 per cent to Rs 4.90 crore year-over-year. This positive trend extended to the full fiscal year FY23, where net sales jumped a significant 2,093 per cent to Rs 8.05 crore and net profit witnessed a remarkable 2,584 per cent growth to Rs 2.23 crore compared to FY22.
The company's shares 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 17.74 per cent stake while an 82.26 per cent stake is owned by the public. From Rs 0.04 to Rs 1.84 per cent, the stock gave multibagger returns of 4,500 per cent in 3 years.
Disclaimer: The article is for informational purposes only and not investment advice.
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