Advik Capital’s Shares See 5.75% Rise As The Expansion Strategy Continues Along With The Rights Issue

Advik Capital Shares surged by 5.75% today, from R's 2.34 to R's 2.49. Ranging in the trading pattern for the stock it has a 52-week high of R 4.10 over and a 52-week low of Rs 1.94. The price increase occurs as the company commences its rights issue and seeks to strengthen its position as an SIB-NBFC by the end of 2025.

The rights issue planned by Advik Capital recently was structured with 19,98,05,013 fully paid-up equity shares whereby each share was to be sold at Rs 2.50 including the premium of Rs 1.50 from the initial offer price. This rights issue was allotted a date record of September 12, 2024 and follows a ratio entitlement of 14:30. On those dates, shareholders had the chance to subscribe between Twitter 24 and October 4, 2024. If fully subscribed, the total number of equity shares held by Advik Capital shall increase from 428,153,600 to 627,958,613.

On October 17, 2024, the Right Issue Committee of the subject company met for the second time in succession in a 48-hour period to declare the allotment of rights shares as dictated by the exigencies of the time.

After consultations with the Designated Stock Exchange (BSE Limited), Merchant Banker and Registrar to the Issue, the Committee sanctioned the distribution of 18,03,66,825 fully paid up equity shares with the value of Rs. 2.50 per share to the eligible applicants.

The rights issue however forms part of Advik Capital's wider strategy to grow and broaden its operations and reduce reliance on existing products. Not long ago, Advik Capital forayed into the supply chain financing business, with a strategic partnership with one of the major FMCG companies targeting the agri products sector. This expansion will allow Advik Capital to deliver tailor-made financial solutions, infrastructure capacity, technical support and sustainability focus. By doing so, the company seeks to improve its resistance to market movements and increase its long-term revenue visibility but yet facilitate business growth across industries.

In terms of growth, it is clear that Advik Capital has been successful and its results depict that growth trend; for instance, in Q1FY25 as compared to the same period the previous year Q1FY24, the company's net sales rose 49.2% to the figure of Rs 227.90 crore, and operating profits increased by 89.2% to reach Rs 4.75 crore. For the quarter, the company's net profit reached a staggering Rs 2.35 crore which is an increase of 235.7%. The company had an annual net sales figure of Rs 840 crore and a net profit of Rs 6 crore in FY24.

Over the past five years Advik Capital has performed well reporting profit growth of 121% CAGR and currently the company's market capitalization stands at Rs 177 crore.

According to the share capital structure as of June 2024, promoters own 21.80% of the company and the public holds the remaining 78.20%. In addition, the shares have increased 49.5 percent compared to the 52-week sixteen low at a figure of Rupee 1.94.

Part of Advik Capital's 2025 plan of achieving SIB-NBFC status includes carrying out an integrated expansion strategic plan which encompasses broadening the range of its business activities, entering new industries such as health care, and strengthening its management team by employing experienced experts in risk management, governance and technologies. The company has assets of 200 crore and is actively improving its operating capacity to ensure sustainable development and financial stability in the long run.