The NBFC space is showing extreme bullishness in line with the rise in economic activity. The sector plays a critical role in participating in the development of the economy. According to a report by the Reserve Bank of India, the NBFC's contribution to the total credit extended to the economy has soared from 16.4 per cent in December last year to 29.1 per cent in February 2023.
Recently, leading NBFC Advik Capital announced plans to finalise the allotment of the rights issue. A rights-share issue is a kind of corporate action in which a listed company invites its existing shareholders to buy additional shares directly from the company at a discounted price.
"In accordance with the Basis of Allotment finalised in consultation with Designated Stock Exchange, i.e. BSE Limited, Merchant Bankers, and Registrar to the Issue, the Rights Issue Committee has approved the allotment of 20,79,60,320 fully paid-up Rights Equity shares of the face value of Re 1 each at a price of Rs 2.40 per Rights Equity share (including a premium of Rs 1.40 per share) to the eligible applicants," it said in a BSE filing.
The BSE-listed NBFC stock has delivered a multibagger return of 521 per cent to its shareholders in the last three years, according to exchange data.
NBFCs are a vital source of credit for micro, small, and medium enterprises (MSMEs) that contribute more than 29 per cent to the GDP. Besides, it also accounts for 50 per cent of the country's total exports.
As per a report by Research and Markets, driven by healthy loan disbursements to small businesses, NBFCs are projected to expand at a CAGR of 18.5 per cent between 2021 and 2026.
NBFCs are regulated by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
