Smallcap stock hits 5% upper circuit after its subsidiary acquired 50% stake in Walnut AI

The shares of the leading financial solution provider hit a 5 percent upper circuit of Rs 604.30 per share after the company’s subsidiary acquired a 50 percent stake in Walnut AI Pte. Ltd.

With a market capitalization of Rs 1,364.09 crore, the shares of Veefin Solutions Ltd (BO:VEEF) were trading at Rs 604.30 per share, increasing around 5 percent as compared to the previous closing price of Rs 575.55 per share.

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Reason for Rise:-

The share of the company has seen bullish movement after Veefin Solutions Ltd through its subsidiary Estorifi Solutions Private Limited acquired a 50% stake consisting of 27,778 Equity shares of SGD 9.54 each of Walnut AI Pte. Ltd. The transaction value of this acquisition is $20,00,0000.

Moreover, the objective of this acquisition is to access the large client base database across multiple geographies and generate additional revenue, by combining the resources and expertise of both entities to create new opportunities for growth and innovation.

Financial performance:-

Looking into Veefin Solutions Ltd’s performance, revenue increased by 19 percent from Rs 16 crore in H2FY24 to Rs 19 crore in H1FY25. During the same duration, net profit climbed by 33 percent from Rs 6 crore to Rs 4 crore.

Future outlook:-

The company projects revenue of ₹120 crore for FY25, aiming to surpass ₹300 crore by FY26. PAT growth is expected to continue at an 18% margin, despite higher spending on acquisitions and marketing, with a focus on consolidating operations and leveraging recent acquisitions for expansion.

Industry Insight:-

India’s supply chain finance market, valued at ₹8-9 lakh crore annually, shows vast growth potential. Veefin aims to expand its market share by offering end-to-end solutions. Management remains optimistic, driven by a robust pipeline of 184 pursuits and a steady influx of new leads.

New developments:-

The company is advancing its PSB Xchange platform, achieving consensus among all public sector banks under a unified contract. It remains focused on expanding product IP, revenue, and profitability through strategic acquisitions, reinforcing its commitment to innovation and growth in the financial services sector.

Management comments:-

Veefin’s management recognizes the competitive environment but is confident in its unique position as a tech provider for banks and financial institutions. They plan to retain control in subsidiaries while considering equity dilution to fuel growth. Upcoming quarterly results and earnings calls will enhance investor communication.

Company profile:-

Veefin Solutions Ltd is an India-based digital lending and supply chain finance (SCF) technology product solutions company. The Company’s supply chain finance is a financial tool that is used to help businesses manage their cash flow and improve their working capital.

Written by:- Abhishek Singh

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