Srestha Finvest Penny Stock Surges 5% as Board Approves Fundraising Through QIP, Preferential Shares

Penny stock Srestha Finvest hit its 5% upper circuit at ₹0.89 on Thursday, October 10, after announcing plans to raise funds through a Qualified Institutional Placement (QIP). The company also shared other important updates from a board meeting held on October 9.

Key Decisions from the Board Meeting

The Board of Directors met on October 9, 2024, between 9:00 P.M. and 10:00 P.M., to discuss several important issues. One of the major decisions was to raise ₹100 crore by issuing new equity shares with a face value of Re.1 each. This will be done through a QIP, following necessary approvals from the company’s members and regulatory authorities.

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The funds raised will be used for various purposes, including repaying debts, meeting working capital needs, general corporate uses, and other permitted activities.

The board also approved issuing up to 93 crore equity shares, each priced at ₹1.05, which includes a premium of ₹0.05 per share. This preferential allotment is also subject to required approvals.

The 93 crore shares will be allocated to multiple investors, including individuals and private companies, such as Sneha Bhandari, Sunil Bhandari, and others. The board also raised the company’s borrowing limit to ₹500 crore and scheduled an Extraordinary General Meeting (EGM) for November 8, 2024, to discuss these developments with shareholders.

Other Key Developments

Srestha Finvest had previously split its shares on September 23, 2024. The stock split turned each ₹2 share into two ₹1 shares.

The company also reported a significant financial turnaround in the 2023-2024 fiscal year, with a profit of ₹173.86 lakh compared to a loss of ₹497.41 lakh the previous year. As per RBI rules, it transferred 20% of its net profit, or ₹37.51 lakh, into statutory reserves.

In 2023-2024, Srestha Finvest also issued 25 crore equity shares to raise funds, which increased its paid-up share capital to ₹116 crore. These shares were later split into 58 crore shares as part of the stock split.

Stock Performance

The stock has gained over 36% in the last year and 46% year-to-date. After dropping in August and September, the stock has risen by 14% so far in October. It remains about 30% below its 52-week high of ₹1.28, reached in July, but has surged 82% from its 52-week low of ₹0.49 in March.