The primary business of Purshottam Investofin is, ostensibly, to provide loans and advances. It is registered as a non-banking financial company (NBFC) with the Reserve Bank of India (RBI). It was earlier called DB Merchant Banking Services.
The company has a market-capitalisation of Rs14.26 crore and trades at a price-to-earnings ratio (PE) of 17.86. It has recorded no growth, or erratic growth, in income or profits. The average revenue in the past four quarters has been Rs1.17 crore and the average net profit for the past four quarters has been Rs19 lakh. It, obviously, has insignificant business. The promoter shareholding has been falling continuously over the past two years. In the June 2017 quarter, it was just 11.53% compared to 22.89% in the June 2016 quarter, 48.02% in the June 2015 quarter and 64.09% in the June 2014 quarter.
But, despite poor growth and the promoter shareholding falling from 64% to 11% in two years, in one year, the price of the stock has shot up 582%, from Rs3.33 on 31 May 2016 to Rs22.7 on 2 August 2017. Even such a case has escaped notice of the market regulator which has just passed the buck to stock exchanges to take action on certain shell companies.