This Multibagger Small Cap Co. Announces Stock Split-Check Details

Stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares. Board of Directors of the company take this stock split decision for dividing the company's outstanding shares into further smaller shares. So though the market value of the total outstanding shares of a company remains the same but market value of a single share is reduced in proportion to the no of shares extracted out of a single share. Likewise, one of the multibagger small cap stock- Steel Exchange has announced stock split, below are the details on the same

About the company

The company is into the trading of all types of structural steel, long products, special steels, semis and raw materials for the steel sector. It also manufactures steel ingots and M.S binding guage wires.

Stock split details

In the filing to the exchanges, the company said, "The Board approved the proposal for Sub division/ Split of Equity Shares of the Company from face value of Rs.10/- each into Equity Shares of face value of Re.l/- each, subject to the approval of the members of the Company in General Meeting".

As for the rationale for the split, the company iterates that it is tofacilitate larger shareholder base to increase liquidity in the capitalmarket and to make shares more affordable to small shareho

Company's financials and stock price trajectory:

The company in its March quarter earnings posted an increase in revenue both sequentially as well as YoY. The revenue came in at Rs. 366.87 crore. Net profit at the company also recorded a whopping growth from Rs. 29.12 crore in March 2021 to Rs. 112.48 in March 2022.

The company's stock price has been a multibagger with 1-year return of 130%, nevertheless on a YTD basis it is in negative. The stock's 52-week low price is Rs. 56.25 while its 52-week high has been at Rs. 262.6 per share.

Even in the weak market on May 19, 2022, the stock has maintained its momentum and is trading in the green.

As far as its valuations are concerned, it seems be on the higher side considering its TTM PE of over 11 as against peers and the sector PE.

Disclaimer

The story primarily discusses upon the stock split in the steel share and is not a recommendation to buy into the share.