Why Vakrangee Share Price is Rising

The stock market is a complex and ever-changing beast. What goes up must come down, and vice versa. But what about stocks that have fallen significantly?

This often haunts investors.

One such tale is that of Vakrangee, which experienced a devastating crash in early 2018, causing the stock to plummet by about 95%. Many investors found themselves on the losing end of the deal.

Unlike many stocks that eventually recover, Vakrangee remained in the throes of its downturn, proving to be a lasting nightmare for those who held on.

Yet, amid the gloom, a glimmer of hope emerges for Vakrangee investors.

The company's stock has witnessed a remarkable upswing, soaring by 70% in the past three months.

While it hasn't quite reached its 2018 levels, this resurgence prompts a closer look into the factors driving the recent positive momentum.

#1 Fund Raising Plan

Shares of Vakrangee, one of India's largest last-mile distribution platforms, were locked in the 20% upper circuit limit on 31 January 2024, hitting a new 52-week high of Rs 30.2 apiece.

This can be because the company announced on 31 January that its Board of Directors is scheduled to meet on 6 February 2024.

The agenda for the meeting encompasses a proposal to raise funds through various instruments, including equity shares, convertible securities, warrants, debt securities, private placement, preferred issue, qualified institution placement, or a combination thereof, as deemed fit by the board.

The realization of this proposal is contingent upon obtaining necessary statutory and regulatory approvals, including the nod from the company's shareholders.

Additionally, the board will approve the financial results for the quarter and nine months ended 31 December 2023.

After this update, a significant surge in volumes was witnessed, with a total of 211.8 million (m) shares traded on both the NSE and BSE.

The heightened activity also attracted high-frequency trading firms, notably HRTI Private Limited (1.5%) and Graviton Research Capital (1.2%), both actively participating in Vakrangee.

These high-frequency trading firms, known for their involvement in capturing spread differentials, have recently expanded their interests to include small, illiquid stocks.

#2 Vortex Engineering Acquisition

Apart from that, on 18 December 2023, the company acquired an 8.8% equity stake in Vortex Engineering Private Limited from International Finance Corporation (IFC).

This move aligns with the company's prior announcement on 12 September 2023, where they had initially signed a binding term sheet with IFC.

As per the announcement, Vakrangee has entered into a Share Purchase Agreement for the said transaction.

This completion has also propelled the positive momentum for the stock.

What Next?

In the recent quarter, the company unveiled "VISION 2030," a strategic roadmap with ambitious long-term objectives.

The plan envisions expanding its reach to over 300,000 outlets and deploying a minimum of 15,000 ATMs.

The overarching goal is to achieve a revenue milestone of US$ 1 billion (bn) and surpass a gross transaction value of US$ 150 bn by 2030.

Currently a key player in financial inclusion, the company operates a substantial network of over 14,000 Banking Business Correspondent (BC) points and ranks as the fourth-largest ATM operator in rural India, boasting a network of 6,300+ ATMs.

Notably, in October of the previous year, the company forged a partnership with Karnataka Bank to extend BC Banking services through Vakrangee Kendra outlets nationwide.

Vakrangee Kendras, distinguished by their exclusive branded format, offer a diverse array of products and services encompassing banking, insurance, ATMs, assisted e-commerce, e-government, and comprehensive healthcare.

With 84% of Vakrangee Kendra outlets strategically positioned in Tier-4 to 6 locations, the company anticipates this collaboration will enhance customer access to banking services even in the remotest corners of the country.

How Shares of Vakrangee have Performed Recently

The Vakrangee stock rose around 14% in the past one year. Over a month, the share price has gained by 57%.

Vakrangee share price touched its 52-week high price of Rs 32.2 on 1 February 2024. Its 52-week low was Rs 12.8 touched on 29 March 2023.

The company is currently trading at a PB (price to book value) multiple of 44.4 times.

About Vakrangee

ICAI Vakrangee Limited incorporated in 28 May 1990 as a Private Limited company under the name Vakrangee Investment & Consultancy Limited.

In April 3 1992 name of the company was changed to Vakrangee Investment and then to Vakrangee in year 1995.

The company has emerged as one of India's largest last mile distribution platform with a physical as well as digital ecosystem in place with a Pan India Presence (PAP).

The company is delivering realtime banking & financial services ATM insurance e-governance ecommerce (including Healthcare services) and logistics services to the unserved and underserved rural semi-urban and urban markets, enabling Indians to benefit from financial social and digital inclusion.

For more details, see the Vakrangee company fact sheet and quarterly results.

You can also compare Vakrangee with its peers:

Vakrangee vs CAMS

Vakrangee vs Affle India

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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