This smallcap stock tripled investors’ money in one year; do you own it?

Shares of BLS International, an online visa consultancy services provider, rallied more than 10% on Thursday, in an otherwise weak broader market. The stock price surged after the outsourcing service provider acquired Zero Mass Private Limited (ZMPL) to become the largest business correspondent after State Bank of India. The smallcap stock has more than tripled investors' money in the last one year, with the stock price rising from ₹64.35 on June 9, 2021, to ₹195.40 in intraday trade today.

Early today, BLS International shares opened higher at ₹178.40 against the previous closing price of ₹177.10 on the BSE. During the session so far, the stock gained 10.3% to hit an intraday high of ₹195.40, driven by strong volume. As many as 1.3 lakh shares worth ₹2.47 crore changed hands over the counter as compared to a two-week average of 0.97 lakh stocks. The market capitalisation of the company surged to ₹3,916.66 crore. In comparision, the BSE benchmark Sensex was trading 35 points lower at 54,857 levels.

Technically, the stock traded in a bullish range, higher than its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. It has gained 1.5% in a week, 12% over a month, and 96% in the past six months. In the calendar year 2022, the stock has gained more than 100%, from ₹94.73 on January 3 to ₹195.40 in intraday trade on Thursday.

BLS International in an exchange filing on Wednesday said that it has acquired 100% stake Mumbai-headquartered, Zero Mass, the country’s largest business correspondent in the country, for an equity consideration of ₹120 crores, including entire equity stake of 63.94% held by Anurag Gupta (main promoter). Post deal, BLS International now owns 88.26% equity stake in ZMPL. State Bank of India continues to hold 6.83% Equity stake in ZMPL.

With this, all cash acquisition from company internal accruals, BLS international becomes the largest business correspondent (BC) network in India. The proposed transaction is carried out through BLS E-Services Private Limited, 100% subsidiary of BLS International. Through this acquisition, BLS International intends to expand and consolidate its BC business.

Commenting on the deal, Shikhar Aggarwal, joint managing director, BLS International said, “We are excited to welcome ZMPL team on-board as it strengthens our business correspondent vertical for the next phase of growth. We believe that through this acquisition, the collective experiences of teams will build synergies and further help BLS International to enhance its reach to deliver trusted banking services to rural and semi-rural India.”

“This acquisition shall result in substantial increase in our touch points from around 3,060 to 14,500+ CSPs, which BLS International would seek to leverage through multiple initiatives in future,” says Aggarwal.

ZMPL has been operating the largest business correspondent network for SBI with around 11,500 active Customer Service Points (CSPs) (around 15% of all the SBI BCs). The company has a pan-India presence with CSPs located across all States and Union Territories of India. Apart from SBI, ZMPL has contracts with Utkal Grameen Bank and Karur Vysya Bank. Incorporated in 2007, ZMPL accounts for 5%-6% of the bank accounts, deposit base and the aggregate value of transactions of the BC system in India.