Srestha Finvest 2:1 Stock Split Board is Expected to Announce Preferential or Rights Issue

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.

Srestha Finvest Limited informs you that a meeting of the Board of Directors is scheduled for Monday, August 19, 2024, at the company’s Registered Office. The agenda for this meeting includes the following key items:

1. Fundraising Initiatives: To enhance the company’s financial resources by raising funds through the issuance of equity shares, convertible instruments, or other securities. This may be done via preferential allotment, rights issue, Qualified Institutional Placements (QIPs), American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs), or any other method or combination thereof, possibly in multiple tranches.
2. Appointment of Professionals: To appoint the necessary professionals, experts, merchant bankers, legal advisors, and other intermediaries required for the fundraising process.
3. Member Approval: To seek approval from the shareholders by passing the necessary resolutions related to the aforementioned board decisions and any related or incidental matters.
4. Other Matters: To consider any other business, subject to the chairperson’s approval.

Additionally, Srestha Finvest Limited proposes a stock split, subject to shareholder and regulatory approval. This will involve splitting each existing share with a face value of Rs 2 into two shares with a face value of Re 1 each. This move is aimed at enhancing market liquidity, broadening the shareholder base, and making shares more accessible to small investors. The company expects to complete this process within approximately two months.

The company has acquired a 75% stake in its newly formed subsidiary, Srestha Greentech Private Limited (SGPL), with an investment of Rs. 37,50,000. SGPL, established on July 30, 2024, will focus on real estate, civil engineering, project management, and green technology projects, including EPC contracts, waste management, and infrastructure development. This acquisition is classified as a related party transaction since the company is the promoter of SGPL.

On Monday, shares of Srestha Finvest Ltd dropped by 5%, falling to Rs 2.02 per share from the previous close of Rs 2.12. The stock’s 52-week high is Rs 2.56, while its 52-week low stands at Re 0.98.

About the Company

Founded in 1985, Srestha Finvest Ltd. is a diversified financial services provider, offering loans, financing, and investment solutions. It holds a specific regulatory license as a Category B Non-Systematically Important Non-Deposit Taking NBFC – Investment and Credit Company. This allows the company to extend loans secured by various assets, including securities, movable and immovable properties, as well as offering hire purchase and leasing options, and trading and investing in shares.

Quarterly Results

In Q4FY24, the company’s total income surged by 710%, reaching Rs 564.16 lakh, compared to Rs 69.68 lakh in Q4FY23. The company reported a net profit of Rs 506.35 lakh in Q4FY24, a significant turnaround from a net loss of Rs 461.37 lakh in Q4FY23, representing a 210% increase.

Annual Results

For FY24, the company’s total income increased by 269% to Rs 1,013.01 lakh, compared to Rs 274.56 lakh in FY23. The company posted a net profit of Rs 173.86 lakh in FY24, a dramatic improvement from the net loss of Rs 497.41 lakh in FY23, marking a 135% increase. This is the first time the company has reported a net profit in five years, after consecutive losses in FY23, FY22, FY21, FY20, and FY19.

With a market capitalization of Rs 165 crore, the company is fully owned by the public. The stock has delivered multibagger returns, rising over 100% from its 52-week low of Re 0.98 per share to Rs 2.02 per share (intraday high). Investors may want to keep an eye on this micro-cap stock.

Disclaimer: This article is for informational purposes only and should not be considered investment advice.