Shriram Finance Ltd is set to announce a stock split and dividend payout, offering double rewards to its investors. The company, a notable multi-bagger in the non-banking financial company (NBFC) sector, is also planning to raise funds through non-convertible debentures (NCDs) via private placement. Following a remarkable 660% surge since the onset of the COVID-19 pandemic, 33 analysts have now recommended a “BUY” on Shriram Finance.
Current Share Performance:
The share price of Shriram Finance is currently at ₹3,350, with a market capitalization of ₹1,25,956.40 crore. Last month, the stock reached a fresh 52-week high of ₹3,652.25 but has seen a correction since then. Its 52-week low stands at ₹1,760.85. Year-to-date, the stock has gained approximately 63.5% on the National Stock Exchange (NSE).
Historical Growth:
In March 2020, just before the first nationwide lockdown, Shriram Finance’s stock hit its lowest point of ₹440. By the end of 2020, amid the lockdown, it had rebounded to cross the ₹1,000 mark. It took two additional years for the stock to exceed ₹2,000, hitting ₹2,130 in December 2023. Remarkably, it reached an all-time high of ₹3,652.25 last month, demonstrating a staggering increase of 661.36% since March 23, 2020.
Upcoming Developments:
Currently, analysts note that the stock may be somewhat overvalued, and the planned stock split could improve liquidity and affordability for both new and existing investors. The company’s Board of Directors will meet on October 25, 2024, to discuss several key matters:
- Approval of unaudited standalone and consolidated financial results for the second quarter and half-year ended September 30, 2024.
- Declaration of an interim dividend for the financial year 2024-25, if applicable.
- Approval of a resource mobilization plan for the issuance of debt securities, such as redeemable NCDs or subordinated debentures, through private placement or public issuance.
- Proposal for the alteration of share capital by subdividing/splitting existing equity shares with a face value of ₹10 each, subject to the approval of the company’s members.
This will mark the company’s first stock split.
Analyst Sentiment:
The consensus recommendation for Shriram Finance Ltd is a strong “BUY,” according to Trendlyne data. All 33 analysts surveyed have expressed a “STRONG BUY,” with a 1-year target price averaging ₹3,562.94 per share, suggesting a potential upside of 6.5%. Antique Stock Broking has also recommended a “BUY” with a target price of ₹3,500.
About Shriram Finance:
Shriram Finance Limited is a retail asset financing NBFC with assets under management exceeding ₹2.33 lakh crore. The company provides financing solutions for passenger and commercial vehicles, micro, small, and medium enterprises (MSMEs), tractors, farm equipment, gold, personal loans, and business loans. With a widespread presence across India, Shriram Finance operates through 3,095 branches and employs approximately 75,813 people, servicing over 8.7 million customers.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Investing in stocks involves risks, and past performance is not indicative of future results. Before making any investment decisions, you should consult with a qualified financial advisor who can assess your individual circumstances and risk tolerance. The information provided herein is based on publicly available data and may not reflect the most current developments. Please conduct your own research and due diligence before making investment choices.
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