BFL Developers Ltd is a non-banking finance company (NBFC) based in Jaipur which apparently deals in trading and investment of corporate securities. It also claims to provide inter-corporate loans and investments. Remarkably, the company showed negative sales twice in the past year—Rs1.25 crore in the December 2016 quarter and Rs79 lakh in the March 2016 quarter. Except for FY17, where it made an annual profit of Rs87 lakh, it has made negligible profits from FY14-16. The promoters hold close to 19% of the shares. About 94% of the publicly-held shares are owned by 21 private limited companies.
The company also listed 51 lakh preference shares of Rs10 each on 4 July 2017, 10% held by promoters and the rest held by three private limited companies. The management has decided to change the name of the company from BFL Developers Limited to BFL Asset Finvest Limited and increase its authorised capital from Rs5.5 crore to Rs12 crore. No reason was offered for the additional issue. Its paid-up capital was Rs5.1 crore as on March 2017. It also announced a dividend of 5% at the last board meeting held on May 30 2017. The stock is illiquid, because it was last traded on 6 June 2017. Even with such poor fundamentals, the share rose by 420%, to Rs68.2 on 6 July 2017, from Rs13.12 on 22 February 2016. Why? Will the regulator inquire?
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam