Business

IIE DIGITAL DESK : lesser-known non-banking financial company (NBFC), Standard Capital Markets Limited, is back in the spotlight as investor sentiment improves following the partial redemption of non-convertible debentures (NCDs) worth over ₹65 crore. Trading as a penny stock below ₹1, this NBFC has stirred interest among retail investors after showcasing signs of financial discipline and stability through recent corporate actions.

Standard Capital Markets, a registered NBFC under the Reserve Bank of India, recently confirmed that it has completed a significant partial redemption of its outstanding NCDs. The total amount redeemed crossed ₹65 crore, indicating a positive move towards improving the company’s balance sheet and financial obligations. This development comes after the company had earlier raised a similar amount through secured, unlisted, non-convertible debentures by way of private placement. The redemption signals not just repayment capacity, but also adds credibility to the company’s financial operations in the eyes of the market.

This NBFC, which has been operational since 1987, primarily deals in financial advisory, arbitration support, due diligence services, and assistance with legal and commercial contracts. Despite its long-standing presence in the financial sector, the company’s stock has often been overlooked due to its penny stock status. However, the recent developments surrounding the NCDs have put it back on the radar of small-cap and micro-cap investors who look for turnaround stories.

Trading at less than ₹1 on the stock exchanges, the stock had previously undergone a stock split and bonus issue in December 2023, bringing down the face value and adjusting the share price to sub-₹1 levels. The move was seen as a strategy to increase liquidity and attract more participation from retail investors. Although the company reported a net loss of ₹0.51 crore in the quarter ending September 2024, it also recorded a 71% year-on-year rise in sales, reaching ₹9.68 crore. The contrast between rising revenue and net loss indicates a phase of transition, where expenses might be rising in the short term as the company attempts to scale its operations.

The partial redemption of over ₹65 crore worth of NCDs has improved investor perception of the company’s ability to meet its financial commitments. On the back of this development, the company’s share price recently hit the upper circuit, suggesting renewed buying interest in a previously neglected stock. Market watchers are now keeping a close eye on the company’s next steps, particularly whether it can return to profitability and maintain financial discipline.

While the stock remains speculative due to its low price and historical volatility, the recent redemption of NCDs and the uptick in operational revenue indicate potential upside for investors with a high-risk appetite. Standard Capital Markets’ story may still be unfolding, but its ability to handle debt responsibly is an encouraging sign in the penny stock segment.