1:2 Stock Split, 1:1 Bonus Issue; Rs 900 NBFC Stock Fixes Record Date On March 5; How To Be Eligible

Capri Global Capital is an upcoming hot stock for its sub-division and bonus issue. Trading a little over Rs 900, Capri Global is in focus this week after fixing the record date for its 1:2 stock split and 1:1 bonus issue. This means that Capri Global will not only give free bonus shares but also split them into half, becoming cheaper and affordable for both new and existing investors. During these corporate actions, this NBFC still be trending and in demand.

Capri Global expects both these decisions shall enhance the free float liquidity of CGCL and aid in shareholder value creation. The Company shall be seeking shareholder approval for the same.

Capri Global Capital Stock Split:

The company's board has approved a stock split from Rs2/- face value to Re1/- face value. The stock split will increase the fully paid-up equity of CGCL from Rs206.23mn pre-split to Rs412.46mn post-split. The authorized share capital will be increased from Rs360mn to Rs720mn to accommodate the increase in paid-up equity capital.

The ratio of a stock split is 1:2, meaning 1 existing share is to be subdivided into 2.

The last split by the company was carried out in November 2016 from Rs10/- face value to Rs2/- face value.

The company fixed March 5, 2024, as the record date to determine eligible shareholders for the stock split. This will also be its ex-split date. To be eligible and get the benefit of a stock split, investors must hold shares of Capri Global in their demat account by the end of March 5.

Capri Global Capital Bonus Issue:

Further, the board approved a bonus issue in the ratio 1:1, that is, one bonus share for every one fully paid-up equity share held by the shareholders. The Company shall utilize Rs 412.46mn from the balance in the securities premium account for bonus issuance. CGCL had Rs18,834mn in the securities premium account as of March 31, 2023.

The record date for the bonus issue is also March 5. Hence, investors must have shares of Capri Global by the end of the record date to be eligible.

Capri Global Capital Earnings:

CGCL maintained AUM momentum with the consolidated AUM including co-lending AUM increasing 54% YoY and 8% QoQ to touch Rs133,621mn. Retail growth momentum during the quarter was driven by Gold (15% QoQ) and Housing (8% QoQ). Co-lending AUM stood at Rs11,948mn comprising 9% of consolidated AUM compared to 8% in Q2FY24 and 5% in Q3FY23.

CGCL has continued to build upon its co-lending partnerships in all three products with strong prospects building up in Gold Loan co-lending. The overall AUM growth was granular with live customer relationships increasing by 195K YoY to touch 300K.

As planned, CGCL paused the aggressive branch expansion post-Q2FY24 and right-sized headcount in some verticals leading to the onset of the anticipated softening course of its cost ratios. The cost-income ratio declined 392bps QoQ to ~63% in Q3FY24. In absolute terms, the operating expenses were unchanged QoQ at Rs2,200mn. This has offset the negative impact of 23bps QoQ spread compression with operating profit increasing by a robust 19% QoQ and 78% YoY to Rs1,296mn.

CGCL expects to benefit from a further softening of its cost ratios and spread stabilization going ahead.

Non-interest income rebounded with its share hitting 30% in net income compared to 25% in H1FY24. The growth was driven by car loan fees and fees from lending businesses with a small one-off contributed by treasury.

Capri Global Capital Share Price:

On February 7th, Capri Global's share price corrected to end at Rs 921.25 apiece, down by 0.45% on BSE with a market cap of Rs 18,999.40 crore.

However, year-to-date, the stock has zoomed by nearly 19%. In a year, the stock rallied by 30% on the BSE.

Capri Global is a diversified Non-Banking Financial Company (NBFC) with a presence primarily across two key verticals - MSME Loans and Home Loans.

Disclaimer: The write-up just highlights the stock split and bonus issue, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.