They've just announced a rights issue, and after it's done, the company could be worth about eighty crore rupees. What's odd is that the stock price hasn't reacted as expected. Usually, after a rights issue, the price adjusts downwards, but here, it's stayed stubbornly low. The rights issue itself is at one rupee per share, a lot higher than the current market price of forty-five paise. This makes it seem like public investors won't be keen, but the promoters have said they'll buy any shares the public doesn't. The big news is that this money will largely go towards paying off debts, including loans from the promoters. This could mean the company becomes debt-free. Kumar thinks this might be a promoter strategy to either boost their ownership or perhaps pave the way for a new owner. A takeover could be on the cards, which might lead to a situation where a new entity buys the company for less than its value on paper after the rights issue. He points out the profits look good, but warns about cash flow in NBFCs and the risk of profit manipulation. He suggests investing cautiously, maybe just a small part of your portfolio. He sees a potential upside to around three rupees, driven by book value or promoter actions. Opinion: This situation presents a classic high-risk, high-reward scenario.

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