1:10 Stock Split: Multibagger Stock To Turn Ex-Split On September 25; Gives 1,785% Returns In 5 Years

IEL Ltd is a multi-bagger stock with returns blooming by 1,785% in 5 years. This multi-bagger will be in focus this week as it will trade ex-split on September 25 for its shares sub-division in the ratio of 1:10. It means that IEL shares will become cheaper on exchanges.

Last week, on Friday, IEL shares ended at Rs 152.85 apiece, up 2.52% on BSE. Its market cap stood at Rs 51.02 crore.

IEL has fixed September 25 as the record date for a stock split in a 1:10 ratio. Simply put, every 1 existing equity share having a face value of Rs 10 each will be subdivided into 10 equity shares having a face value of Re 1 each.

Generally, listed companies declare a stock split of already owned shares into much smaller shares. This is done to improve liquidity by breaking the shares into smaller sizes. The face value of the shares reduces in proportion to the split ratio, however, there is no impact on the company's share capital and reserves. Although the price value of a stock reduces in a stock split, it the number of shares held rises in the investors' portfolio of that specific stock.

The reason behind IEL's stock split is somewhat similar to increase the Shareholders base and also to improve the liquidity of the Equity Shares of the Company so as to facilitate more participation of retail investors.

IEL shares have seen a significant upside in 5 years. The stock has rallied by a massive 1,784.71% from September 2018 to date. The stock was merely near the Rs 8 price level in late September 2018.

Currently, the stock's 52-week high and low is at Rs 205.90 apiece and Rs 61.86 apiece respectively. Year-to-date, the stock soared by over 50%, however, in six months, the upside is nearly 94% on BSE.

Founded in 1990, IEL's main activities are development, production and engineering in industrial electronics. Its specialty is the development and production of modern high-quality electronic measuring and protection devices as well as process monitoring and control devices and systems.

As per Trendlyne data, the stock's RSI and MFI are in the mid-range of 44.1 and 65.7 respectively. While its 1-year Beta is at 0.52, indicating very low volatility. However, its price-to-book ratio is high in the industry at 52.8, while the TTM PE ratio is below the industry median at 22.4.

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