2:1 stock split: Multibagger stock under Rs 5 in focus as the Board is likely to announce preferential issue or rights issue!

From Re 0.98 per share (52-week low) to Rs 2.02 per share (intraday high), the stock gave multibagger returns of over 100 per cent.

Srestha Finvest Limited informed you that the meeting of the Board of Directors of our company is scheduled to be held on Monday, August 19, 2024, at the Register Office of the Company to transact the following major businesses:

• To augment the financial resources of the Company via funds raising by way of the issue of equity shares/convertible instruments/other securities through preferential allotment, right issue, QIP’s, ADR GDR, FCCB or any other method or combination thereof, in one or more trenches.
• To appoint requisite professionals, experts, merchant bankers, legal advisors and other intermediaries for fundraising.
• To seek members’ approval using passing the requisite resolution(s) for the above-said board decisions and other matters connected therewith and/or incidental thereto.
• To consider any other matter, with the permission of the chair.

Additionally, Srestha Finvest Limited proposes a stock split, subject to shareholder and regulatory approval, where each existing Rs 2 face value share will be divided into two Re 1 face value shares. This is intended to enhance market liquidity, broaden the shareholder base, and make shares more accessible to small investors. The company anticipates completing this process within approximately two months.

The company also subscribed to 75 per cent of the equity shares of its newly incorporated subsidiary, Srestha Greentech Private Limited (SGPL), for a total consideration of Rs. 37,50,000. SGPL, a domestic company incorporated on July 30, 2024, will engage in real estate, civil engineering, project management, and green technology projects, including EPC contracts, waste management, and infrastructure development. The acquisition constitutes a related party transaction as the Company is the promoter of SGPL.

On Monday, shares of Srestha Finvest Ltd plunged 5 per cent to Rs 2.02 per share from its previous closing of Rs 2.12. The stock’s 52-week high is Rs 2.56 while its 52-week low is Re 0.98.

About the Company

Established in 1985, Srestha Finvest Ltd. is a multifaceted financial services company offering various solutions, including loans, financing, and investments. They hold a specific regulatory license: a Category B Non-Systematically Important Non-Deposit Taking NBFC - Investment and Credit Company. This allows them to provide loans secured by various assets (securities, movable and immovable properties), offer hire purchase and leasing options, and engage in trading and investing shares.

Quarterly Results

The total increased by 710 per cent to Rs 564.16 lakh in Q4FY24 compared to the total income of Rs 69.68 lakh in Q4FY23. The company reported a net profit of Rs 506.35 lakh in Q4FY24 compared to a net loss of Rs 461.37 lakh in Q4FY23, an increase of 210 per cent.

Annual Results

The total income increased by 269 per cent to Rs 1,013.01 lakh in FY24 compared to the total income of Rs 274.56 lakh in FY23. The company reported a net profit of Rs 173.86 lakh in FY24 compared to a net loss of Rs 497.41 lakh in FY23, an increase of 135 per cent. The company reported a net profit in FY24 after reporting a net loss for the past 5 years i.e., FY23, FY22, FY21, FY20 and FY19.

The company has a market cap of Rs 165 crore and its 100 per cent stake is owned by the public. From Re 0.98 per share (52-week low) to Rs 2.02 per share (intraday high), the stock gave multibagger returns of over 100 per cent. Investors should keep an eye on this micro-cap stock.

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

Also Read: 99 per cent returns from its 52-week low; Board likely to raise funds via issuance of equity shares, convertible instruments or any other mode!