This Small Cap Multibagger Stock Announces 10:1 Split of Equity Shares

Saregama India Ltd is a small-cap company in the media & entertainment industry with a market cap of Rs 7,531.04 Cr. The firm, which is part of the RP Sanjiv Goenka Group, is India's well-known music publisher as well as a PAN India TV programming and music producer. On the 24th of February 2022, the company's Board of Directors approved a 10:1 stock split. The rationale for the stock split, according to the company, is to improve the liquidity of the Company's shares in the Stock market and to make it affordable to the small retail shareholders as also to broad base the small retail shareholders.

The company has said in an exchange filing that "Sub-division (split) of 1 (one) Equity Share of the Company having a face value of Rs. 10/- each (fully paid up) to be sub-divided into 10 (Ten) Equity Shares of face value of Re. 1/- each (fully paid-up); and consequently, alteration of Capital Clause of the Memorandum of Association of the Company resulting from the said sub-division."

The meeting of the Company's Board of Directors began at 11:00 a.m. and ended at 01:10 p.m., following which a 10:1 stock split was announced subject to such regulatory / statutory approvals as may be required, including the approval of the shareholders of the Company, by means of postal ballot. The split ratio is sub-division of existing 1 (one) Equity Share of face value of Rs. 10/- each fully paid up into 10 (Ten) Equity Shares of Re. 1/- each fully paid, as per the outcome of the board meeting.

At the board meeting, it was also decided that "The adoption of new Articles of Association of the Company to make them consistent and aligned with the provisions of the Companies Act, 2013, as amended and the Rules framed thereunder and the provisions of Secretarial Standard on Board and General Meetings."

On the NSE, the company's shares rose from Rs 1040.45 on February 25, 2021 to Rs 3,905.95 on February 24, 2022, 3:30 p.m. IST, giving shareholders a multibagger return of +2,865.50 (275.41 percent) in a year. The stock has gained +655.90 (20.18 percent) in the previous six months but has lost -1,029.35 (-20.86 percent) in the last month. The stock is down -1,482.95 (-27.52 percent ) on a year-to-date (YTD) basis.

Saregama India's Q3 Results were released earlier this month, with a net profit of Rs 43.54 crore, up 37.8% from the previous quarter. The company has a strong dividend track record, continuously declaring dividends for the past five years. On the ex-dividend date of 31-01-2022, the company announced an interim dividend of 300 percent accounting to Rs 30.00 per share, which was announced on 19-01-2022.