Capital Trust Oct 25 RI review - (Not Rated)

•    This is the 2nd RI from the company since June 2025.
•    The company is providing financial services from last for decades.
•    It has posted growth in its top lines, but bottom lines declined for the last two fiscals.
•    It marked huge losses for Q1 of FY26 that raise major concern.
•    Though this RI is at a discount of 51+% based on last traded price, it is a risky bet.
•    Only well-informed/cash surplus/risk savvy investors may park moderate funds for long term.

ABOUT COMPANY:
Capital Trust Ltd. (CTL) has a proven track record of nearly four decades in the financial service sector in providing credibility and stability to its operations. The Company operates through 300 branches across 11 states, giving it a strong presence in semi-urban and rural regions of India. This widespread footprint enables access to a large and diverse customer base, particularly in underserved areas. The company had 1500+ employees as of the date of this offer document.

CTL has positioned itself as a trusted lender to MSME clients in semi-urban and rural India, a segment that continues to be underpenetrated by traditional banking institutions. This focused approach provides significant growth opportunities while fulfilling financial inclusion objectives.

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 17009702 equity shares of Re. 10 each at a fixed price of Rs. 14 per share to mobilize Rs. 23.81 cr. The RI opens for subscription on October 20, 2025, and will close on November 11, 2025. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of October 10, 2025. The company is asking for full money on application for the number of shares applied. Post allotment, RI shares will be listed on BSE and NSE. The company is spending Rs. 1.75 cr. for this RI process, and from the net proceeds, it will utilize Rs. 10.00 cr. for adjustment of unsecured loans from Promoters and group companies, and Rs. 6.85 cr. for augmenting capital base, and Rs. 5.22 cr. for general corporate purposes. This is the 2nd RI from the company since June 2025, which is a big surprise.

The RI is self-managed by the company itself, and MAS Services Ltd. is the registrar to the issue. 

Post-RI, company’s current paid-up equity capital of Rs. 17.01 cr. will stand enhanced to Rs. 34.02 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 47.63 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted total income / net profit, of Rs. 79.58 cr. / Rs. 2.16 cr. (FY24), Rs. 96.00 cr. / Rs. 1.10 cr. (FY25), and for Q1 of FY26 ended on June 30, l2025, it posted a loss of Rs. 8.32 cr. on a total income of Rs. 12.64 cr. Thus, while it posted degrowth in bottom lines for two reported fiscals, it marked huge loss for Q1 of FAY26 that raise major concern. Its NAV declined to Rs. 45.64 as of June 30, 2025, against Rs. 50.51 as of March 31, 2025.

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods. It will adopt a prudent dividend policy, based on its financial performance and future prospects. However, offer document is silent on its dividend policy.

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 511505 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 45.23 on October 09, 2025, and opened on an ex-right basis at Rs. 31.11 on October 10, 2025. Since then, it has marked a high/low of Rs. 33.95 / Rs. 28.05. The scrip last closed at Rs. 28.75 as of October 17, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 83.41 / Rs. 23.91. The counter is currently under ASM ST: Stage 1.

The promoters’ holding has declined to 54.13 for the last two quarte4rs ended on September 30, 2025, against 64.68% for quarter ended March 31, 2025. 

RI is at a discount of around 51.30% based on its last traded price of Rs. 28.75 as of October 06, 2025, and appears tempting, but its recent financial performance with rising losses raises major concern. The counter is well maintained above the RI price to tempt investors.