Rs 40 to Rs 73: Share Price of this Financial Products Distributor Zooms 69% in 5 Days

When the month of August comes around, it seems to always serve as a reminder that time is going by faster than you realise.

We're halfway through the year, and these last seven months felt even quicker than the ones preceding them, right?

Small-cap stocks have struck gold in 2024 so far. The index is up 25% and individual stocks have rallied even more.

One such smallcap - Vedant Asset - saw a steep jump in its share price in the week gone by.

The stock price rallied more than 65% in 5 days, climbing from Rs 40 to Rs 75.

About Vedant Asset

Incorporated in 2015, Vedant Asset is a corporate business correspondent of several banks, and it also acts as a mutual fund distributor through a partner base of more than 350 Vedant Mitra partners working in various rural and semi-urban locations.

Over the years, the company has expanded into providing services in the field of disbursing Government DBT subsidies, Adhaar-linked subsidies, and more through its network of Kendras.

It launched its IPO in September 2022 and raised Rs 30 million.

What Sparked the Recent Rally?

There's no definite reason which can justify this rally, to be honest. The company has not reported its results or anything and there hasn't been any public news that has been disclosed.

Usually, after a steep rise like such, stock exchanges reach out to the company asking them to disclose anything that has had a material impact on its share price.

One reason which might have impacted its stock price is the positive sentiment around asset management companies (AMCs) and companies like Vedant Asset, which are indirectly related to the stock exchange services.

The mutual fund (MF) industry in India has been on a remarkable ride. The rise in retail investor participation and the robust performance of the equity markets have significantly boosted the earnings of AMCs.

Vedant Asset, though a relatively smaller player, has seen a steady growth in its topline and bottomline.

Financial Snapshot

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	6.05	10	16	20	25
Growth (%)	-	67%	57%	24%	29%
Operating Profit	1.1	1.8	2.9	4.5	3.9
OPM (%)	18%	18%	18%	23%	15%
Net Profit	0.3	0.9	1.5	2.6	2.4
Net Margin (%)	6%	9%	10%	13%	9%
ROE (%)	4.1	5.4	6.3	6.7	4.3
ROCE (%)	63.2	7.9	7.0	7.0	5.8
Dividend (Rs)	0	0.0	0.0	0.0	-
Debt to Equity (x)	13.8	0.1	0.0	0.0	-

Data Source: Ace Equity

In March 2024, the company opened 21 new customer service points in the state of Odisha in collaboration with Bank of India.

Going forward, the company plans to set-up 70+ new customer service points under the same scheme.

The company has an asset light model where it doesn't have to invest much constantly, and side by side it generates profits like a machine.

Vedant Asset Share Price Data

Vedant Asset currently trades at Rs 73.4 per share with a marketcap of Rs 202 million.

The company still falls under the SME category, and it's only listed on the BSE.

Vedant Asset has a 52-week high of Rs 77 touched on 16 August 2024 and a 52-week low of Rs 37 touched on 5 August 2024.

In the past 1 year, the stock price has rallied 64%.

Since listing, Vedant Asset shares are up 8%.

Here's a table comparing Vedant Asset with its peers -

Comparative Analysis

Company	Vedant Asset	Aditya Birla AMC	Nippon Life AMC	Shriram AMC	UTI AMC
ROE (%)	4.3	28.2	29.9	-17.7	17.5
ROCE (%)	5.8	35.6	35.9	-7.2	22.1
Latest EPS (Rs)	0.9	28.6	18.1	-6.6	48.8
TTM PE (x)	86.3	24.7	38.1	0.0	21.4
TTM Price to book (x)	3.9	6.2	10.8	10.1	3.5
Dividend yield (%)	0.0	1.9	2.4	0.0	4.5
Industry PE	35.8
Industry PB	8.9

Data Source: Ace Equity, Equitymaster

As of March 2024, promoters of the company hold 73.2% in the company while the rest is held by public shareholders.

Foreign investors and mutual funds have stayed away from this company as it's still illiquid and it may not have met the criteria.

To know more, check out the company's detailed shareholding pattern here.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...