Low PE high ROE multibagger penny stock below Rs 5; Board announced rights issue!

The stock gave multibagger returns of 450 per cent in just 3 years whereas the BSE Sensex Index is up by 74 per cent.

Advik Capital Ltd informed that a meeting of the Board of Directors of the company has approved rights issue in the ratio of 17:18 i.e., 17 equity shares for every 18 equity shares held by the eligible equity shareholders of the company as on the record date with the right to renounce. The total number of securities proposed to be issued is up to 20,79,60,320 equity shares of face value of Rs 1 each for an amount aggregating up to Rs 4,991.04 lakh.

The rights issue record date is Thursday, September 07, 2023, and the issue price is Rs 2.40 per equity share (Including a premium of Rs 1.40 per share). The issue opening date is Monday, September 18, 2023 and the closing date is Friday, September 29, 2023.

The rights issue for Advik Capital Ltd is still open and closes on Friday, September 29, 2023. This means that shareholders who held shares of the company as of the record date on September 7, 2023, are eligible to purchase additional shares at a discounted price, in the ratio of 17 rights issue shares for every 18 shares held.

To participate in the rights issue, shareholders must exercise their rights by the closing date. If they do not exercise their rights, the rights will lapse and the shareholder will lose the opportunity to purchase the additional shares at a discount.

Advik Capital Ltd is in the business of financing, inter-corporate investments and capital market activities. The company has a market cap of Rs 57 crore and has delivered good profit growth of 149 per cent CAGR over the last 5 years. The company reported positive numbers in its Quarterly Results (Q1FY24) and annual results (FY23). The stock is trading at 0.92 times its book value.

The stock’s 52-week high is Rs 5.16 and its 52-week low is Rs 1.96. The shares of the company have a PE of 11.9x whereas the industry PE is 24x and an ROE of 28 per cent.

The stock gave multibagger returns of 450 per cent in just 3 years whereas the BSE Sensex Index is up by 74 per cent. Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.