This stock turned Rs 1 lakh into Rs 10 lakh in one year, did you miss the rally?
Aseem Thapliyal June 8, 2021
Share of Magma Fincorp has delivered 919% returns to its shareholders in one year. The stock, which closed at Rs 15.30 on June 8, 2020, rose to Rs 156.25 on BSE today. An amount of Rs 1 lakh invested in Magma Fincorp stock a year ago would have turned into Rs 10.21 lakh today.
In comparison, Sensex has risen merely 52.16% during the period. However, the stock was stuck in lower circuit of 5% today, losing Rs 8.20 to Rs 156.25 on BSE.
Magma Fincorp share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The share has gained 290.63% since the beginning of this year.
Market cap of the firm fell to Rs 11,927 crore.
The stock of Mumbai-based non-banking financial company has outperformed its peers in last one year. Bajaj Finance share has risen 129.6% during the period.
The phenomenal rise in the stock can be attributed to reports in February 2021 that Adar Poonawalla's firm Rising Sun Holdings and two members from the promoter group were set to buy controlling stake in the firm.
In early March, shareholders of the company approved a plan to raise up to Rs 3,456 crore by issuing preference equity shares to Rising Sun Holdings.
Rising Star will buy 60 per cent stake in Mumbai based non-banking financial company (NBFC) in a Rs 3,456 crore cash deal. The open offer is subject to receipt of statutory and other regulatory approvals.
The stock also saw positive sentiments after its board of directors on February 6, 2021 approved issuance of debt securities in the nature of non-convertible debt securities for the financial year 2021-22 for an amount up to Rs 3,000 crore.
Boosted by the two developments, the share which stood at Rs 45.15 on January 29, 2021 has zoomed to Rs 156 today.
The financial performance of the firm does not reflect the rally in the stock.
In Q4 of last fiscal, net loss widened to Rs 647.72 crore against loss of Rs 35.51 crore in the corresponding period of previous fiscal. Sales fell 6.14% to Rs 572.84 crore in Q4 against Rs 610.32 crore in the same period of previous fiscal.
On an annual basis, the firm reported a loss of Rs 558.96 crore in last fiscal against Rs 27.05 crore profit for the fiscal ended March 2020.
Sales fell 7.74% to Rs 2,318.90 crore in last fiscal against Rs 2,513.43 crore for fiscal ended March 2020. In Q3 of last fiscal, the Mumbai-based NBFC reported a 41.98 per cent fall in net profit at Rs 12.99 crore against Rs 22.39 crore during the same period last year.
Sales declined 3.24 per cent to Rs 589.33 crore compared to Rs 609.06 crore during the previous quarter ended December 2019. Magma Fincorp's loan disbursements rose 45 per cent YoY on the back of rise in used assets and affordable housing segments.
Incorporated in 1978, Magma Fincorp is a small-cap company that operates through more than 295 branches in 22 states and a union territory and has a strong presence in rural and semi-rural India.