1:10 Stock Split, 157% Returns In 1 Year: Gems & Jewellery Stock In Focus On Issuance Of Shares; BUY?

On Tuesday, shares of jewellery company PC Jeweller Ltd jumped around 5 per cent to an intraday high of Rs 15.26 per share from its previous closing of Rs 14.54 per share. The stock's 52-week high is Rs 16.30 and its 52-week low is Rs 4.40. The company has a market cap of over Rs 8,910 crore with multibagger returns of 555 per cent in 5 years.

Why Did PC Jeweller Share Price Surge?

The early rally in PC Jeweller shares came on the back of a corporate announcement made after market hours on December 11. The company disclosed that it had issued shares via a private placement to a consortium of lenders as part of a debt settlement plan.

"The board of directors, on December 11, approved the issuance of 5,17,11,462 shares of face value ₹10 each by way of preferential allotment on a private placement basis to the consortium lenders, classified under the non-promoter, public category, to settle part of their outstanding debts," PC Jeweller stated in its regulatory filing.

Following this issuance, the company's ownership structure will see a shift. The promoters and promoter group will hold 25,40,62,568 shares, amounting to a 42.93% stake, while non-promoters will control 33,77,36,662 shares, representing 57.07% of the total equity.

The company also noted that the issue price and quantity of equity shares would be adjusted post the record date for the planned stock split, which is scheduled for December 16, 2024. The split will reduce the face value of the shares from Rs 10 to Rs 1 each.

In addition, PC Jeweller announced the reappointment of Ramesh Kumar Sharma as a full-time director for a term of three years, effective February 7, 2025.

Stock Performance

PC Jeweller has had a strong run in 2024. The stock recorded its 52-week high of Rs 19.30 on 18-Dec-2024, while its 52-week low of Rs 4.19 was marked on December 27, 2023. Over the last year, the stock has delivered multibagger returns of 269%, making it one of the standout performers in the midcap segment.

On a monthly scale, PC Jeweller shares are up approximately 17% so far in December, supported by investor optimism around its financial restructuring and operational measures.

Despite its performance over the past year, PC Jeweller faces potential challenges as it navigates its debt restructuring and works to strengthen its financial health. Market watchers are keeping an eye on the impact of the stock split and the broader market sentiment, which could influence the stock's trajectory.