Multibagger penny stock hits 5% upper circuit on stock split, rights issue announcement

Penny stock under ₹15: Shares of penny stock Minolta Finance reached their 5 percent upper circuit limit at ₹12.93 on Thursday, December 5, marking a new 52-week high. The surge followed the company’s board approval of a stock split and a rights issue aimed at enhancing liquidity and raising funds. This marks the sixth consecutive session in which the stock has hit its upper circuit, reflecting strong investor interest.

From its 52-week low of ₹6.24, recorded in December 2023, the stock has more than doubled, registering a gain of over 107 percent. In just the first three trading sessions of December, Minolta Finance has rallied over 21 percent, building on a 15 percent increase in November and a 6.5 percent rise in October.

Year-to-date (YTD) in 2024, the penny stock has surged 88 percent, showcasing its potential as a multibagger investment. Over the past year, it has climbed 76 percent, reflecting sustained growth momentum.

In the long term, Minolta Finance has delivered exponential returns. Over the past three years, the multibagger stock has skyrocketed 443 percent, rising from ₹2.38 in December 2021. This remarkable performance underscores investor confidence in the company’s strategic initiatives and future prospects.

Stock Split and Rights Issue

The Board of Directors of Minolta Finance Limited has approved a stock split, reducing the face value of each equity share from ₹10 to Re 1. This 1:10 stock split will result in each existing share being divided into 10 shares with a face value of Re 1 each.

In addition to the stock split, the board approved a significant increase in the company’s authorised share capital. The authorised capital will rise from ₹10.2 crore, comprising 1.02 crore equity shares with a face value of ₹10 each (or Re 1 each post-split), to ₹60 crore, consisting of 6 crore equity shares. This change will require an amendment to Clause V of the company’s Memorandum of Association, subject to approval from shareholders via a postal ballot.

The company highlighted that the stock split aims to enhance the liquidity of its shares and broaden its shareholder base by making the shares more affordable for retail investors. Minolta Finance anticipates completing the stock split within three months from the date of the board’s decision.

In a parallel move, the board also approved raising up to ₹50 crore through a Rights Issue. This fundraising initiative will offer equity shares to eligible shareholders based on a record date, which will be announced later. The Rights Issue will be executed in accordance with regulatory requirements outlined by the Securities and Exchange Board of India (SEBI), including the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013.

The terms and conditions of the Rights Issue, including the issue price and entitlement ratio, will be determined by the Board of Directors in due course.

Established in 1993, Minolta Finance Limited is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India. The company is listed on the Bombay, Kolkata, and Guwahati Stock Exchanges. It engages in various financial activities, including inter-corporate deposits, share trading, leasing, lending to corporate and individual clients, and investing in the capital markets.

These strategic initiatives, including the stock split and the rights issue, are expected to strengthen the company’s capital structure and support its growth plans.