This multibagger stock delivered return of 742% in 5 years!
What's the story
Kellton Tech Solutions, a small-cap stock that has provided multibagger returns over the past five years, is in the news. The company has announced a 1:5 stock split and plans to raise funds through the issuance of warrants. The decision was taken by the company's board during a meeting yesterday. An extraordinary general meeting (EGM) will be held on July 11 to seek shareholder approval for these moves.
Split details
Kellton Tech announces stock split
The board has approved a stock split in the ratio of 1:5. This means that each ₹5 face value share will be subdivided into five equity stocks of ₹1 each, fully paid-up. The record date for this subdivision will be decided after shareholder approval through the EGM. The move is aimed at improving the liquidity and encouraging participation from small and retail investors by making shares more affordable.
Capital adjustment
Increase in authorized share capital
Kellton Tech's current authorized share capital of 12 crore shares of ₹5 each will be increased to 60 crore stocks of ₹1 each after the proposed stock split. However, the total authorized capital shall remain unchanged at ₹60 crore. The company also wants to raise funds by issuing and allotting up to 55 lakh warrants on a preferential basis to select promoter and non-promoter investors.
Fundraising details
Each warrant will be convertible into 1 equity share
Each warrant issued by Kellton Tech shall be convertible into one equity share of ₹5 each. The issue price is fixed at ₹126 per warrant, including the share's face value of ₹5 each and a premium of ₹121. The total fundraising might go up to ₹69.3 crore, subject to approvals from regulatory authorities as well as the company's members at the upcoming EGM. Post-issuance, promoter Matnic Finvest LLP's stake in Kellton Tech will increase from 35.74% to 38.20%.
Market performance
A look at the stock performance
Kellton Tech Solutions has delivered an impressive multibagger return of 742% in the last five years. The small-cap stock has gained 30% over the last year. It touched a 52-week low of ₹95.05 on April 7 this year and a high of ₹184.30 on July 15 last year. The company's strategic decisions, including the stock split and fundraising plans, are likely to further shape its market performance in the coming months.