2 Shares With Stock Split Announcement To Keep A Watch On

A stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares. So, the process of dividing the outstanding shares into further smaller shares is known as stock splits. In the process though the market value of the total outstanding shares of a company remains the same but market value of a single share is reduced in proportion to the number of shares extracted out of a single share.

So, here we discuss two stocks with stock split announcement that you can keep a watch on

1. Precision Wires:

The small-cap company is the leading manufacturer of enamelled copper winding wires. The company's self-solderable and hermetic grade wires find application in refrigeration, auto electrical and air-conditioning industries. On November 3, 2021, the company's board approved stock split whereby equity share of Rs. 5 each (old face value) will be subdivided into 5 new equity shares of Rs.1 each fully paid (new face value). The record date for the same has been confirmed to be December 23, 2021.

As against the BSE Small cap index which fetched a YTD return of 57%, the stock's YTD returns are at 151%. In the 3-months time the stock has returned 62%, while its 1-month return has been 29%. Ever since the stock's record date has been announced for the split, it is seeing traction and last on December 17 hit a fresh 52-week high price of Rs. 410 apiece on the NSE.

The company's second quarter performance has been outstanding with total income from operations rising both sequentially and YoY to Rs. 706.65 cr. Net profit at the company for the Q2Fy22 period also increased to Rs. 15 crore from Rs. 11.5 crore in the previous June ended quarter. The company's debt to equity is also at a negligible 0.07 for Fy21.

In the September quarter, FIIs have betted on the stock and raised their holding in it to 0.16%. Promoter holding in the stock is at 59.6%.

Technical indicators including RSI, MACA and 10-day/20-day/30-day/50-day/100-day/200-day EMA also suggest strength in the stock

2. Greenlam Industries:

The company in its board meeting on December 13, 2021 approved sub-division/Split of face value of Equity Shares of the Company having face value @ Rs. 5/- each to Re. 1/- each i.e. in the ratio of 5:1. Rationale for the split as given in the filing is "to encourage wider participation of retail investors by making the equity behind the shares more affordable for them and to enhance the liquidity of equity shares of the company".

This is again a small-cap company into laminates manufacturing. The product range of the company includes greenlam laminates, switchboard panels, fire retardant laminates among others.

The company's total income from operations rose to Rs. 423 cr. in the September quarter as against Rs. 306 crore in the previous quarter. Net profit at the company also registered growth both on a YoY and QoQ basis to Rs. 21.71 crore.

Promoter shareholding in the firm has been lowered down by 1 percent to 53.9% in Q2Fy22. FIIS on the other hand have betted on the scrip and raised their shareholding to 1.55%, while DIIs have cut their stake to 14.85% in the same period. On a 1-year basis, the stock has returned 122 percent, while its last traded price is Rs. 1787.

Disclaimer:

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only.

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