A small-cap stock below Rs 350 is up for its first-ever stock split in the ratio of 1:10. Not only that the company has also approved allotment of equity shares against the conversion of warrants on a preferential basis. This is none other than Rushil Decor under the plywood and laminates sector. Broadly, Rushil's shares have witnessed consolidation, however, its price-to-equity share is lower than the sector which is a key positive.
Rushil Decor Share Price:
On BSE, Rushil's share price ended at Rs 312.15 apiece, up by 1.7% with a market cap of Rs 828.50 crore. The smallcap's 52-week high and low are at Rs 406.70 and Rs 243.95 apiece respectively.
As per BSE data, the stock has a price-to-equity ratio of 19.22x which is lower than the sector's PE ratio which is above 36x.
However, YTD, the stock has slipped by 18.5% on BSE.
Rushil Decor Stock Split:
In a board meeting held this week, the company received approval for subdivision/ split of each equity share of face value of Rs. 10/- (Rupees ten only) each, fully paid up into 10 (ten) equity shares of the face value of Re. 1 /- (Rupee one only) each, fully paid up.
Hence, Rushil is up for a stock split in the ratio of 1:10.
The Record Date for sub-division/ split of existing equity shares will be intimated in due course, it said.
In general terms, share splits mean the subdivision of a listed company into smaller shares depending upon the ratio. These could be done to improve liquidity, lessen the value of the stock, make it cheaper or simply attract new buying from both existing and new investors.
Rushil Decor Shares Allotment:
Rushil is allotting up to 65,000 equity shares of the Company of the face value of Rs. 10/- each, at a premium of Rs. 287 apiece to two promoters against their warrants.
In December last year, the company allotted 41,30,000 convertible warrants to a total of 38 allottees on a preferential basis for an issue price of Rs. 297/- per warrant, out of which Rs. 30.66 Crores (25% of the issue price) has already been received as the initial subscription amount at the time of allotment of the warrants.
Further, the company on May 9 allotted 1,90,000 equity shares by conversion of 1,90,000 warrants to 5 allottees (Non-Promoters) from the total 38 allottees.
Moreover, out of the remaining 75% amount, 2 allottees (Non Promoters) have deposited Rs. 1,44,78,750/- in aggregate towards their respective subscription and have exercised their right to convert a total of 65,000 warrants into 65,000 equity shares of the Company of face value Rs. 10/- each.
Accordingly, the company received board of directors approval on May 24 for the allotment of 65,000 equity shares of the Company of face value of Rs. 10/- each, at a premium of Rs. 287/- per share, under the exercise and conversion of 65,000 convertible warrants (out of the balance 39,40,000 convertible warrants allotted) against receipt of the balance subscription amount (i.e. 75% of the issue price) to the allottees.
Rushil Decor Expansion:
The stock split announcement also comes after the company made a strategic expansion into South America. With exports already reaching over 50 countries, Rushil Decor is set to penetrate one of the largest markets for MDF globally.
In its statement, the company said, that as a leader in MDF manufacturing in India, Rushil Decor is well-equipped to meet the high demand in South America. The company recently posted a 9% growth in the January to March 2024 quarter compared to the same period last year. Export revenue contributed 28% to the total revenue in the fourth quarter of FY24, highlighting the company's significant international footprint. According to Precision Reports, the global MDF market was valued at USD 24,942.77 million in 2024 and is projected to reach USD 29,965.13 million by 2027.
The global laminate market is projected to reach a staggering USD 11.98 billion by 2030.
Hence, Rushil Decor is strategically positioning itself to capitalize on this lucrative market through its upcoming greenfield project, meticulously designed to cater to the burgeoning export demand for laminates.
The company also plans to export MDF products to the South American regions creating potent synergies across its product lines.
Rushil Decor is well-equipped to benefit from the increasing demand in this region, effectively increasing its revenue potential and further solidifying our global footprint.
Founded in 1993, Rushil Decor Limited is a globally leading company in modern interior infrastructure and eco-friendly, composite wood panels, committed to shaping a better planet. Leveraging modern technology, inspiring designs, and next-generation innovations, Rushil Decor is passionate about setting new industry standards and providing superior experiences, ensuring high productivity.
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