Stock splits are carried out to boost the liquidity of the company's shares. In this the company's existing shares are sub-divided into multiple shares. So to say the process of dividing the company's outstanding shares into further smaller shares is called stock-split.
Likewise, as the decision on the stock split is taken by the board of directors and listed companies go for it. In the month of May, an IT services provider BlackBox will go for it.
About the company:
BlackBox is a trusted IT solutions provider delivering cutting-edge technology solutions and world-class consulting services to businesses around the globe. The company is a small cap company with a m-cap of Rs. 2601 crore.
Stock split details and its likely impact on the stock price
In the announced stock split, the stock's FV shall see a change from Rs. 10 to Rs. 2. So, the split is perhaps in 1:5 ratio and hence if you held 1 share before the split, after the split is initiated you would have 5 shares. Also, the stock's price will see a change by 1/5th in value say currently it is trading at Rs. 792.85 then its price post the split will be Rs. 158.57, hence more affordable.
Note the ex-date when the stock price shall adjust for the split is May 13.
Financials of the company
In the December ended quarter the firm's revenue from operations saw an increase both sequentially and YoY to Rs. 78.86 crore. Though the form could lower its losses in the period under review, it is still financially weak YoY with net loss at Rs. 0.67 crore during the quarter as against Rs. 0.25 crore profit in the same quarter a year ago.
Stock price trajectory
The stock's 52-week low and high price is Rs. 711 and 1692. While it all time low and high price are Rs. 12.38 and Rs. 1750, respectively. Currently the stock is trading close to its 52-week low at Rs. 792.85.
The stock is discussed for its split and the investors or shareholders in the scrip need to be mindful that the additional shares are credited into their account.