Kapil Raj Finance Limited is an Indian financial services firm primarily engaged in lending and investment activities. Listed on the **BSE (Security Code: 539679)**, the company is currently navigating a transitional phase characterized by capital restructuring, a shift toward formal **NBFC** status, and efforts to broaden its retail investor base. --- ### **Core Business Model and Asset Composition** The company operates as a financial intermediary, focusing on generating revenue through interest income and the management of an investment portfolio. Its business model is strictly aligned with the criteria of a **Non-Banking Financial Company (NBFC)** under Section 45I of the RBI Act, 1934. * **The "50-50" Profile:** The company’s operations are defined by its financial assets, which constitute more than **50% of its total assets** and contribute more than **50% of its gross income**. * **Lending Operations:** The company grants both secured and unsecured loans to a diverse clientele, including companies, firms, and LLPs. Management reports that interest receipts and repayments are regular, with **no overdue amounts** currently recorded. * **Asset Lean Structure:** A notable feature of the company’s balance sheet is the total absence of **Property, Plant and Equipment (PPE)**, Intangible Assets, or immovable property. The asset base is almost entirely comprised of **financial assets** and an **inventory of shares** held in demat form. * **Working Capital:** The company maintains a conservative debt profile with no sanctioned working capital limits exceeding **Rs. 5 crores** from banks or financial institutions. --- ### **Capital Restructuring and Liquidity Strategy** To enhance market liquidity and make equity participation more accessible to retail investors, Kapil Raj Finance is executing a significant overhaul of its share capital structure. **1. Stock Split (Sub-division):** The company has initiated a **1:10 stock split** to reduce the nominal value of its shares. | Event | Details | | :--- | :--- | | **Record Date** | **April 15, 2025** | | **Pre-Split Face Value** | **Rs. 10** per share | | **Post-Split Face Value** | **Re. 1** per share | | **Authorized Share Count** | Increasing from **1.10 Crore** to **11 Crore** shares | **2. Capital Expansion via Warrant Conversion:** The paid-up capital saw a substantial increase in the **2023-24** period, driven by the conversion of **5,800,000 warrants** into equity shares at an exercise price of **Rs. 12** (including a **75%** balance payment of **Rs. 9** per warrant). | Particulars | Value (as of March 31, 2024) | | :--- | :--- | | **Authorized Share Capital** | **Rs. 11,00,00,000** | | **Current Paid-up Capital** | **Rs. 10,94,00,000** | | **Previous Paid-up Capital** | **Rs. 5,14,00,000** | | **Net Capital Increase** | **Rs. 5,80,00,000** | --- ### **Shareholding Structure and Governance** The company’s equity is predominantly held by the public, with a focus on resident individuals. Recent disclosures indicate a **nil (0%) promoter holding**, suggesting a widely dispersed ownership among non-promoter categories. **Current Shareholding Pattern:** * **Resident Individuals:** **95.30%** * **HUF:** **2.47%** * **Body Corporate:** **2.23%** * **NRI:** **0.00%** **Leadership and Management:** * **Managing Director:** **Mr. Amit Balkrishana Ghume** (Tenure: **Dec 30, 2023 – Dec 29, 2028**). * **Board Additions:** **Mrs. Jalpa Kalpesh Darji** was appointed as a Non-Executive Director in **February 2025**. * **Compliance Leadership:** **Ms. Preeti Kakkar** was appointed as Company Secretary and Compliance Officer in **October 2024**. --- ### **Listing Status and Regulatory Transition** The company is streamlining its regulatory standing and exchange presence to focus on the **BSE Limited**. * **Exchange Consolidation:** In **October 2024**, the Board approved the **delisting** of securities from the **Metropolitan Stock Exchange (MSEIL)**. Trading continues exclusively on the **BSE (ISIN: INE332Q01015)**. * **NBFC Registration:** While the company meets the financial criteria for an NBFC, it is currently in the process of formalizing its registration with the **Reserve Bank of India (RBI)**. * **Accounting Standards:** Financial statements are prepared in accordance with **Indian Accounting Standards (Ind AS)** under **Section 133** of the Companies Act, 2013. --- ### **Risk Factors and Compliance Deficiencies** Investors should note several critical regulatory and operational risks identified in recent audits and statutory filings. **1. Statutory Filing Lapses:** The company has a history of delayed filings with the **Registrar of Companies (ROC), Delhi**, leading to additional fees. * **Missing Forms:** **MGT-7** (Annual Returns) and **AOC-4** (Financials) for **FY 2022-23** and **FY 2023-24** have not been filed. * **Board Approvals:** **Form MGT-14** for the approval of Directors' Reports and Financial Statements is missing for multiple years (**2019-20, 2021-22, 2022-23, and 2023-24**). **2. Governance and Board Eligibility:** * **Independent Directors:** Auditors have flagged that Independent Directors are either not registered in the mandatory database or have not cleared the required examinations. * **Director Regularization:** While two Additional Directors were regularized in **2023**, the mandatory **Form DIR-12** remains unfiled. **3. Operational and Transparency Risks:** * **Deposit Rule Violations:** The company has borrowed **demand loans from third parties**, which auditors suggest may violate **Deposit rules** and related compliance frameworks. **Form DPT-3** for **March 31, 2024**, has not been filed. * **Digital Transparency:** The company website is currently **non-functional**, a violation of **Regulation 46 of SEBI (LODR) Regulations, 2015**, which hinders data dissemination to shareholders. **4. Legal and Solvency Status:** * **Litigation:** No material pending litigations or proceedings under the **Benami Transactions (Prohibition) Act** were reported as of **September 2024**. * **Solvency:** Auditors issued an **unmodified opinion** for the **FY 2023-24** financials, stating no material uncertainty regarding the company's ability to meet liabilities within a **one-year period**.