Shares of a non-banking financial company (NBFC) appreciated to the tune of 20 percent on Monday’s early trades to reach a fresh 52-week high of ₹ 495.75 apiece on the National Stock Exchange (NSE). At 12:46 PM, its shares were trading at ₹ 488.95 apiece.
Authum Investment & Infrastructure is engaged in the business of fund-based activities like investment in shares, securities, mutual funds, and providing loans and advances, and so on.
The company informed the exchanges that its wholly-owned subsidiary Reliance Commercial Finance Limited (RCFL) has approved to subscribe to 4,43,41,194 equity shares of Reliance Infrastructure Limited at a price of ₹ 201.00 per share and 7,59,77,000 equity shares of Reliance Power Limited at a price of ₹ 20.00 per share, on preferential issue basis, consequent to upon conversion/appropriation of the outstanding dues of RCFL.
Authum Investments and Infrastructure had completed a ₹ 3,351 crore takeover of RHFL, formerly an Anil Ambani company, in what was the biggest resolution of a debt-laden non-banking finance company (NBFC) outside the bankruptcy courts. It took over another Anil Ambani Company Reliance Commercial Finance in October 2022.
The company’s shares have delivered multibagger returns of 161 percent in the past six months, 235 percent in the past year and a massive 19255 percent in the past five years. If an investor would have invested ₹ 1 lakh in the company’s shares six months ago, the value of their holdings would have been ₹ 2.61 lakhs today. If the same amount was invested one year ago, they would hold ₹ 3.35 lakhs, and a massive ₹ 1.93 crores if it was invested five years ago!
With a market capitalization of ₹ 7,017 crores, Authum Investment & Infrastructure is a small-cap company. It has a low return on equity of 7.86 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 29.22, which is slightly higher than the industry P/E of 23.88, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 71.47 percent stake in it, followed by retail investors with 21.39 percent, and foreign institutions with 7.14 percent.
Written by Simran Bafna
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