🥇 First rule of investing? Know when to save! Up to 55% off Investing Pro before BLACK FRIDAYCLAIM SALE

NBFC stock jumps 3% after company to acquire 79% stake in ISARC for ₹262 Cr 

Published 15-10-2024, 11:38 am
NBFC stock jumps 3% after company to acquire 79% stake in ISARC for ₹262 Cr 
AUTH
-

During Tuesday’s trading session, the shares of a registered NBFC with core business operations focused on investing and lending surged 3.6 percent at Rs. 1,845 on BSE, after entering into an agreement to buy 79.28 percent of an asset reconstruction company for nearly Rs. 262 crores.

With a market cap of Rs. 31,317.7 crores, at 10:40 a.m., the shares of Authum Investment & Infrastructure Ltd (NS:AUTH) were trading in the green at Rs. 1,843.9, up by nearly 3.6 percent, compared to its previous closing price of Rs. 1,780.6.

Is Authum Investment & Infrastructure in your watchlist? Do you want to know which stocks should be a part of your portfolio? Access our Advanced Screener feature here

What’s the news:

Authum Investment & Infrastructure Limited entered into a binding share subscription and purchase cum shareholders agreement with India SME Asset Reconstruction Company Limited (ISARC).

According to the latest filings with the stock exchanges, this agreement involved the acquisition of 79.28 percent of the expanded share capital of ISARC.

Specifically, Authum will purchase 13 crore equity shares, representing 56.52 percent of ISARC’s expanded share capital, for Rs. 176.8 crores. Additionally, the company will acquire 5.235 crore equity shares, equivalent to 22.76 percent of the expanded share capital, for Rs. 85.3 crores, on a fully diluted basis.

Upon completion of this transaction, Authum Investment will hold 79.28 percent of ISARC’s expanded share capital, making ISARC a subsidiary of Authum Investment.

About the Target Entity:

India SME Asset Reconstruction Company Limited (ISARC) is an asset reconstruction company engaged in the business of securitisation/asset reconstruction, as permitted by the RBI.

Incorporated in 2009, ISARC is backed by sponsors such as SIDBI, SIDBI Venture Capital Ltd., PNB, and BOB. The majority of the Directors are also current and/or retired bankers, with 50 percent being Independent Directors.

ISARC’s vision is to become the leading Asset Reconstruction Company focused on unlocking idle non-performing assets (NPAs) within the financial sector, particularly in the MSME sector. The company aims to achieve this through innovative resolution mechanisms for NPAs, ensuring their productive use.

As of FY24, ISARC reported a net worth of Rs. 129.68 crores and a turnover of Rs. 2.47 crores. In comparison, its turnover was Rs. 10.17 crores in FY22 and Rs. 5.78 crores in FY23.

Impact of acquisition:

This acquisition aligns with Authum Investment’s long-term strategy to develop a diversified credit business, with the Asset Reconstruction Company (ARC) identified as a key area for growth.

The ARC will serve as a dedicated platform for acquiring and revitalising distressed assets, creating opportunities to implement a differentiated strategy in this sector, supported by robust capital and turnaround capabilities.

Financials:

The company experienced significant growth in its total income, showing a year-on-year rise of around 2215.4 percent from Rs. 61 crores in Q1 FY24 to Rs. 1,412.4 crores in Q1 FY25.

Similarly, its net profit increased during the same period from Rs. 32.6 crores to Rs. 1,092.8 crores, indicating a rise of nearly 3252.2 percent YoY.

Stock Performance:

The stock has delivered multibagger returns of nearly 172.4 percent of returns in one year, as well as around 156 percent returns in the last six months. So far in 2024, the shares of Authum Investment have given positive returns of about 82.8 percent.

About the company:

Incorporated in 1982, Authum Investment and Infrastructure Limited is a non-deposit-taking Systemically Important NBFC registered with the Reserve Bank of India (RBI) and is primarily engaged in the business of providing loans and making investments/trading in shares and securities.

The company is engaged in long-term equity investment across listed and unlisted space, and recently diversified into building a fully integrated Credit Platform.

Authum Investment invests mostly in large and mid-cap companies which are either market leaders or have the potential to become market leaders in 5-7 years.

Written by Shivani Singh

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post NBFC stock jumps 3% after company to acquire 79% stake in ISARC for ₹262 Cr appeared first on Trade Brains.

Read More

To understand more about InvestingPro, watch this video: https://www.youtube.com/watch?v=_WfQcN5vjI

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.