What's driving the renewed frenzy in Money Matters shares?

Moneycontrol Bureau

A 50% jump in its stock price in less than two weeks had Money Matters Financial Services shooting off this letter to the stock exchanges.

"There are no events / information / announcements (including pending announcement) that have a bearing on the operation / performance of the Company and which in our opinion are price sensitive and can have any bearing on the price/volume behavior in the scrip."

At Friday's price of around Rs 126, the stock is a long way off from its record high of Rs 712 touched last year in November, just before MD & CEO Rajesh Sharma was arrested by the CBI for allegedly bribing bank officials to arrange loans for Money Matters' clients.

So what could be the reason for the sudden interest in the stock?

Most likely a combination of the cash in the company's books and the low liquidity in the stock.

The company's current market cap is around Rs 435 crore, and its latest balance sheet shows it having around Rs 340 crore in cash and cash equivalents.

(Only Rs 16 lakh of it is in the CBI's possession). This kitty includes money raised through qualified institutional placement in October last year. On an equity base of around 3.48 crore shares, the cash in hand works out to roughly Rs 100 per share.

And the stock is as illiquid as the company