1:10 Split Soon, 1st Ever; Below Rs 120, NBFC Penny Stock Rises 1,716% In 4 Years; Rs 50K Becomes Rs 9 Lakh

Avonmore Capital & Management Services is a penny stock under the NBFC segment, trading below Rs 120. This penny stock is set to split up anytime soon in the ratio of 1:10. Generally, a stock sub-division leads to an increase in demand for the said listed company and they become cheaper for both new and existing customers. Also, for existing customers, the number of shareholdings rises, but the capital reserve remains the same. Hence, a lot more action in Avonmore can be expected.

But did you know Avonmore has been one of the best-performing penny stocks after the Covid-19 era? Yes, this NBFC is a multi-bagger and has given not double or triple but quadrable-digit returns since the first nationwide lockdown that took place in late March 2020.

After a trading session on May 10, Avonmore shares ended at Rs 118.05 apiece, down by 0.6% on BSE with a market cap of Rs 275.68 crore. The stock's 52-week high and low are at Rs 130.01 apiece and Rs 61.93 apiece respectively.

Despite the latest hiccups, Avonmore is still on a positive note overall YTD. So far in 2024, the stock gained by over 44%. In a year, the stock jumped by 83%.

But Avonmore shares stood at Rs 6.50 apiece on March 23, 2020, just two days before the first lockdown came into effect on March 25, 2020. Broadly, March 2020 was an extremely bearish month for markets globally, and hence, Avonmore too faced the brunt. The share price of Rs 6.50 is also Avonmore's lowest price level in 10 years.

That being said, from the current market price, Avonmore shares are up by a whopping 1,716.15% as of May 10, 2024.

Example:

Let's suppose, an investor bought Avonmore's shares at Rs 6.50 price level with an investment value of Rs 50,000. The number of shares received would be around 7,692 (Rs 50,000/Rs 6.50). By the end of May 10, 2024, he or she has gained up to Rs 8,58,075 profits on their investment of Rs 50,000 in around 4 years, taking their corpus value to Rs 9,08,075.

Also, the same investors are in for a treat as Avonmore will subdivide its 1 existing equity share into 10 equity shares. Going by the same example, the number of 7,692 shares will become 76,920 equity shares (7,692 X 10).

Avonmore Capital & Management Services Stock Split:

The NBFC player received board of directors approval for the sub-division of 1 equity share of the company having a face value of Rs 10/- each into 10 (Ten) equity shares having a face value of Rs 1/- each, subject to regulatory/statutory approvals as may be required and the approval of the shareholders of the Company.

Giving its rationale for the split, Avonmore said, "To enhance the liquidity in the capital market, to widen shareholder base and to make the shares more affordable to small investors."

The company plans to execute its share split within 3 months from the date of shareholders' approval.

Avonmore Capital specializes in providing strategic financial solutions. The company plans to identify and invest in businesses that can grow over long time horizons and produce long-term value. This helps to enhance Shareholders' and Employees' Wealth while keeping Nations' Interests on priority.

The company specializes in identifying scalable business models, creating an execution-ready plan, investing its resources, monitoring and implementing the strategy and finally exiting the business at a formidable value at an appropriate time.