Srestha Finvest Penny Stock in Focus: EGM Approves Capital Raise via QIP; Key Updates for Investors

Srestha Finvest, a penny stock trading below ₹1, is likely to draw investor attention on Monday, November 11, following key developments from its recent Extraordinary General Meeting (EGM). The Non-Banking Financial Company (NBFC) held the EGM on November 8 at its registered office in Chennai, where shareholders approved a special resolution to raise capital through a Qualified Institutional Placement (QIP).

Highlights from the EGM:

At the EGM, shareholders approved multiple resolutions that will support the company’s fundraising and expansion goals. The primary approval was for raising capital through QIP, targeting eligible institutional investors. This includes issuing equity shares, fully convertible equity warrants on a preferential basis, and increasing the borrowing limit for the company.

In an exchange filing, Srestha Finvest stated that the funds raised would be allocated toward repaying or pre-paying existing debts, addressing working capital needs, and funding other corporate initiatives as allowed under current regulations.

Key Financial Moves:

1. QIP for Equity Shares: On October 9, the board approved raising ₹100 crore through QIP by issuing equity shares with a face value of ₹1 each. This initiative reflects the company’s strategic intent to bolster its financial base and improve liquidity.
2. Preferential Issue of Shares: The board also approved the issuance of 93 crore equity shares at ₹1.05 each, which includes a premium of ₹0.05 per share. These shares are allotted to a diverse set of investors, broadening the company’s stakeholder base.
3. Increased Borrowing Limit: To support future growth and financial resilience, the borrowing limit was increased to ₹500 crore.
4. Stock Split: Previously, in July 2024, the board approved a stock split in a 1:2 ratio, aimed at improving stock liquidity and making shares more accessible to retail investors. This is the second time the company has undertaken a stock split, following the 1:5 ratio split in October 2016.

Srestha Finvest Share Price Trend:

The Srestha Finvest penny stock has experienced an uptrend this year, rising by 11.5% year-to-date. The stock hit a 52-week low of ₹0.49 on March 28, 2024, before reaching a 52-week high of ₹1.28 on July 26. In November, the stock showed an 8% gain after witnessing declines in August (-12%), September (-20%), and October (-19%).

Investors should watch for Srestha Finvest’s upcoming board meeting on November 14, when the company will disclose its unaudited financial results for the quarter ending September 30, 2024. This financial update, coupled with recent capital-raising measures, may shape investor sentiment in the near term.

Disclaimer: Srestha Finvest’s strategic moves to raise funds via QIP and expand borrowing limits reflect a proactive approach to strengthen its financial position. However, investors should approach penny stocks cautiously and consult certified financial advisors before making investment decisions.