1:5 vs 1:2 Stock Split: Record Date Shall Be Decided For Sub-Division of Shares; Buy Any?

Two small-cap firms, Mazda Limited and Rama Phosphates Ltd, have announced a stock split; the record date will be disclosed when the time comes. In India, Rama Phosphates Limited (RPL) is a prominent manufacturer of Single Super Phosphate (SSP) fertiliser. The products that Rama Phosphates Ltd (RPL) produces include phosphoric fertilisers, such as Single Super Phosphate (SSP) in both powder and granule form, mixed fertilisers, such as NPK of different grades, fortified fertilisers, such as Boronated Single Super Phosphate (both powder and granule), and micronutrients, such as magnesium sulphate. Mazda is an engineering firm based in India's western region. Founded in 1990, Mazda Ltd. is a small-cap company with a market value of Rs 538.21 crore.

Mazda Stock Split

The Board of Directors "Approved the sub-division/ split of existing 1 (One) Equity Share of face value of Rs. 10/-(Rupees Ten Only) each fully paid up into 5 (Five) Equity Shares of face value of Rs. 2/- (Rupees Two) each fully paid up, subject to shareholders approval. The record date for the purpose of above sub-division/split of Equity Shares shall be decided after obtaining approval for sub-division/ split from the shareholders through postal ballot electronic voting process and will be intimated in due course," said the company in a stock exchange filing.

The rationale behind the stock split is to improve the liquidity of the company's shares, to make it more affordable for small investors and also to broaden the base of small investors, said Mazda.

Mazda Share Price Target

"Mazda stock price is bearish on the Daily charts with strong resistance at 1450. A Daily close below support of 1311 could lead to a target of 1200 in the near term," said A R Ramachandran, Independent Research Analyst.

Rama Phosphates Stock Split

The Board of Directors considered and approved "Sub-division/ split of the existing 1 (One) Equity Share of the Company, having face value of Rs 10/- (Rupees Ten Only) each, into 2 (Two) Equity Share having face value of Rs (Rupees Five Only) each, subject to the approval of the Shareholders of the Company through Postal Ballot. The Record date for sub-division/ Split of existing Equity shares shall be decided in consultation with Stock Exchanges after taking aforesaid approval of the Shareholders of the Company," said Rama Phosphates in a stock exchange filing.

"The Company being listed and traded on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), sub-division/ split of shares is intended to enhance liquidity of the Company's equity shares in the stock market and make the shares more affordable for small investors. By increasing the number of shares available at a lower face value, the Company aims to broaden its shareholder base, participation, and improve marketability," said Rama Phosphates in a regulatory filing.

Rama Phosphates Share Price Target

"Rama Phosphates stock price is bearish on the Daily charts with strong resistance at 210. A Daily close below support of 195 could lead to a target of 179 in the near term," recommended A R Ramachandran, Independent Research Analyst.

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