Step Two Corporation Limited (**STCL**) is a Kolkata-based **Non-Banking Financial Company (NBFC)** registered with the Reserve Bank of India (**RBI Registration No. 05.02614**). Established in **1998**, the company operates as a **Non-Deposit taking Non-Systemically Important NBFC (NBFC-ND)**. STCL is currently undergoing a transformative phase characterized by a total change in management control, a significant capital infusion, and a strategic pivot toward digital-first credit intermediation for India’s underserved MSME and consumer segments. --- ### **Strategic Reorganization and Change in Control** STCL is transitioning from a legacy holding structure to a consolidated promoter model led by **Mr. Anuj Agarwal** (the Acquirer). This shift is designed to streamline decision-making and aggressively pursue growth in the Indian financial services sector. * **The Takeover Mechanism:** The transition is being executed through a combination of a **Share Purchase Agreement (SPA)** for **1,783,900** shares (**24.12%** of expanded capital) at **₹11.00** per share, and a **Preferential Allotment** of **1,300,000** shares (**17.57%**) at **₹15.00** per share. * **Mandatory Open Offer:** To comply with SEBI regulations, a mandatory offer was extended to public shareholders for **1,416,780** shares (**19.15%**) at a revised price of **₹16.50** per share. * **Post-Transaction Ownership:** Upon completion, the Acquirer is expected to hold up to **5,547,300** shares, representing **74.99%** of the total expanded equity. This remains within the **75%** limit, ensuring compliance with the **25% Minimum Public Shareholding (MPS)** requirement. * **Asset Integrity Commitment:** To ensure stability during this transition, the new management has committed to a **2-year moratorium** on the disposal or encumbrance of significant company assets, except for routine business rationalization. --- ### **Core Business Operations and Revenue Model** STCL operates as a pure-play financial services entity. As of March 31, 2025, financial assets constituted **93.5%** of total assets, and financial income accounted for **100%** of total income. * **Credit Intermediation:** The primary revenue driver is the provision of **Business Loans** and credit facilities to various entities. * **Asset Management:** The company actively engages in the trading and investment of **Shares & Securities**. * **Target Segments:** The company is pivoting toward **MSMEs**, young tech-savvy individuals, and unserved rural populations. * **Product Expansion Pipeline:** Management intends to diversify the portfolio into **pre-owned car loans**, **digital personal loans**, and **Loans Against Property (LAP)**. --- ### **Capital Structure and Financial Performance** The company has recently overhauled its capital base to support its expanded lending mandate. | Metric | Pre-Allotment (Jan 2024) | Post-Allotment (Apr 2025) | | :--- | :--- | :--- | | **Authorised Share Capital** | **₹5.35 Crores** | **₹7.85 Crores** | | **Paid-up Equity Capital** | **₹4.24 Crores** | **₹7.39 Crores** | | **Total Number of Shares** | **4,247,300** | **7,394,800** | | **Face Value per Share** | **₹10** | **₹10** | **Historical Financial Indicators (Audited):** | Parameter (₹ in lacs) | FY 2022-23 | FY 2021-22 | | :--- | :--- | :--- | | **Revenue from Operations** | **86.35** | **39.09** | | **EBITDA** | **67.40** | **19.81** | | **Profit After Tax (PAT)** | **49.55** | **14.33** | | **Net Worth** | **594.45** | **542.65** | *Note: For FY 2023-24, the company reported a revenue decrease of **66%** and a net loss of **₹29.86 lacs**, leading to a dividend skip to conserve capital for the current restructuring.* --- ### **Operational Framework and Regulatory Compliance** STCL adheres to the **Master Direction – RBI (NBFC – Scale Based Regulation) Directions, 2023**. * **Governance:** Led by Managing Director **Mr. Anuj Agarwal**, who brings over **15 years** of financial analysis expertise. The company recently adopted a new **Memorandum and Articles of Association** to align with the **Companies Act, 2013**. * **Fundraising Mandate:** The Board holds a broad authorization to raise capital via **Non-Convertible Debentures (NCDs)** and **Qualified Institutions Placements (QIP)**. * **Listing and Demat:** Listed on **BSE** and **CSE**. Approximately **89.52%** of shares are dematerialized via **NSDL** and **CDSL**. * **Insolvency Status:** There are **no pending proceedings** against the company under the **Insolvency and Bankruptcy Code, 2016**. --- ### **Risk Management and Mitigation Strategies** The company employs a board-overseen risk framework to navigate the volatility of the Indian credit market. * **Credit & Counterparty Risk:** Mitigated through a structured **Loan Sanction Process** and periodic board reviews of the loan book. * **Liquidity Management:** STCL uses the **indirect method** for cash flow monitoring, maintaining reserves in highly liquid instruments with maturities of **less than 3 months**. * **Market Risk:** Oversight of the securities portfolio to manage volatility in equity prices and interest rate shifts. * **Operational & Cyber Risk:** Implementation of a structured methodology to protect information security and internal processes. --- ### **Critical Risk Factors and Challenges** Investors should note several regulatory and market-specific headwinds: * **Regulatory Non-Compliance:** The company appointed a professional Non-Executive Director in March 2023 without prior **RBI approval**, violating **Para 42** of the Scale Based Regulations. This may invite regulatory penalties. * **Exchange Suspension:** While active on the BSE, trading of STCL shares is currently **suspended on the Calcutta Stock Exchange (CSE)**. Furthermore, **804,800** forfeited shares from 2016 have yet to be updated in CSE records. * **Public Float Requirements:** Following the change in control, the company must successfully navigate the **12-month window** to restore the **25% Minimum Public Shareholding** to avoid delisting risks. * **Systemic Liquidity:** The RBI’s recent **25 percentage point increase** in risk weights for bank exposures to NBFCs may tighten access to affordable funding for smaller players like STCL. * **Competitive Pressure:** The company faces intense competition from **Fin-tech startups** and traditional banks that are increasingly utilizing digital underwriting to target the MSME sector.