1:5 Stock Split: Multibagger Smallcap Stock To Trade Ex-Split Next Week, Gives Over 720% Returns In 5years

Smallcap company, Cantabil Retail India is the only stock split to watch out in the trading week from October 30th to November 3rd. The clothing company has declared a stock split in the ratio of 1:5 for its shareholders. The stock has emerged as a multibagger in 5 years.

As per the regulatory filing, Cantabil announced a stock split of a 1:5 ratio --- which means a sub-division of every 1 existing share having a nominal face value of Rs 10 each to be sub-divided into 5 equity shares having a nominal face value of Rs 2 each.

The rationale behind the stock split is to boost the stock's liquidity and make it affordable for small investors, as per Cantabil. The record date for the stock split is fixed on November 2, 2023.

The expected time for completion of share splits is November 3rd, 2023.

Typically, 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.

On October 27th, Cantabil's share price ended at Rs 1,113.85 apiece, up by a whopping 5.51% on BSE. The company's market cap is around Rs 1,818.65 crore.

The garments and apparel maker's 5-year performance makes the stock a multi-bagger as it has rallied by a whopping 727% on BSE. The stock was below Rs 135 levels on November 2, 2018.

Cantabil Retail India is in the business of designing, manufacturing, branding and retailing of apparel under the brand name of CANTABIL. The company has a network of over 450 exclusive retail outlets & employee strength of more than 3700 spread across India.

On the Trendlyne website, Cantabil Retail India is under the mid-range performer category which means that these stocks have high durability, but midrange valuation scores and midrange momentum. These stocks are considered financially durable, but in the middle of the road in terms of how much momentum the stock has in the market, and how expensive it is.

Further, Trendlyne data revealed that the stock's RSI and MFI are in mid-range at 51.3 and 30.9 respectively. The price-to-book ratio is high in the industry at 8.2, while PE TTM is at 27.8 which is below the industry median. The 1-year beta comes at 0.25, indicating a very low-volatility case.

The company will announce its September quarter earnings for FY24 on October 31st.