1:10 Split In 5 Days, 11,500% Returns; One Rs 1,850 Green Energy Stock To Split In 10 Shares; Calculate Gains

KPI Green Energy, the renewable energy and solar power company, is set to split for the first time next week. KPI will split in the ratio of 1:2, for which it has a fixed record date of July 18. Trading above the Rs 1,850 price level, KPI Green will split after being overvalued against its sector.

KPI Green's Fundamentals And Technicals:

KPI's price-to-equity ratio is currently high at 107.54, as per BSE data. A stock split could improve liquidity and further increase demand for KPI Green while its overvalued share price becomes cheaper for both new and existing investors.

Nonetheless, KPI's return on equity is at 13.86% which is healthy as the normal range for RoE is mostly between 10% to 20%. Among other key positives for KPI Green is its debt-to-equity ratio which is less than 1 and steady, which means that most of its assets are funded via equity. Also, KPI has emerged as a mutual funds darling in the June 2024 quarter, withholding of this investors basket rising to 0.32% in the stock.

Regarding technicality, KPI Green's MFI and RSI are also stable at 57.7 and 55.2. Generally, RSI and MFI at the 30 level hint that a stock is oversold, while the same indicators if above 70, signal that the stock is overbought.

KPI Green Share Price:

KPI Green's share price ended this week's trading session at Rs 1,850.25 apiece, with a market cap of Rs 11,153.79 crore. The stock's 52-week high and low are at Rs 2,109.25 apiece and Rs 496.92 apiece respectively.

YTD, KPI Green share price surged over 94%, while in a year, the stock emerged as a multi-bagger with gains of over 225.58%. In 5 years though, KPI Green gives mind-boggling 11,500.31% returns on BSE. The stock price was merely at Rs 15.95 apiece on BSE.

KPI Green Energy Stock Split:

KPI Green Energy will split in the ratio of 1:2. The company fixed Thursday, July 18, 2024, as the 'Record Date' for determining the eligibility of Shareholders for subdivision/split of equity shares having a face value of Rs. 10/- (Rupees Ten only) each, fully paid-up into 2 (Two) equity shares having face value of Rs. 5/- (Rupees Five only) each fully paid-up.

Calculate Your Stock Split Gains:

During a stock split, the number of shares increases in the investor's portfolio, however, the share capital remains the same.

For example: If you hold 100 shares of KPI Green as of July 12, 2024, then your number of shares will rise to 200 (100X2).

However, the share capital will not change. The true gains or losses after the stock split will be realised as the stock moves ahead after the record date.

Taking the same example, if an investor held 100 shares of KPI Green at Rs 1850.25 apiece, then their number of shares will increase to 200 with the share price getting cheaper to Rs 925.125. While the share price is cheaper, as face value gets trimmed too. But: 2 shares of KPI Green at Rs 925.125 with a face value of Re 5 each = 1 share of KPI Green at Rs 1,850.25 at a face value of Rs 10.

Only those shareholders will be eligible for the KPI Green stock split, who held its shares by the end of July 18, the record date.

KPI Green Dividend And Bonus Issue:

Apart from turning ex-split next week, KPI Green will also be in focus for its final dividend payout for FY24. KPI has also announced a final dividend of 2% i.e. Re. 0.20 (Twenty Paisa only) per equity share of the face value of Rs.10/- each for the financial year 2023-24.

Earlier, this year in February, the company allotted 2,00,94,203 equity shares having a face value of Rs.10/- each as bonus equity shares, in the ratio of One (1) equity share having a face value of Rs. 10/- each for every Two (2) existing equity share having face value of Rs. 10/- each. The bonus issue ratio is 1:2.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.