5 stocks turning ex-split this week: Do you own any?

Osia Hyper Retail

For the purpose of sub-division of face value of ₹1 equity share of the face value of ₹10 per share into 1 equity share of face value of ₹1 per share the company has fixed record date as Monday, March 13.

Medico Remedies

For the purpose of 1:5 stock split, the company has fixed record date of Thursday, 16th March, 2023 for ascertaining the eligibility of shareholders.

Shree Securities

For the purpose of 10:1 stock split, the record date has been fixed as 16th March, 2023 by the Board of Directors of the company.

Hi Tech Pipes

For the purpose of 10:1 stock split, the company has fixed March 17, 2023 as the record date.

Vivanta Industries

“The Board considered the proposal for sub-division of 1 (One) equity share of the Company having face value of Rs. 10/- each into 10 (Ten) equity shares having face value of Rs. 1/- each, subject to regulatory /statutory approvals as may be required and the approval of the members of the Company,” said Vivanta Industries in a stock exchange filing. For the purpose of stock split, the company has fixed record date as 17-03-2023.

Sonam Chandwani, Managing Partner KS Legal and Associates said “A stock split is when a company divides its existing shares into multiple shares to make them more affordable for investors and increase liquidity. It doesn’t change the company’s overall value or an investor’s holdings. Investors can benefit from a stock split by being able to buy more shares at a lower price, and it’s seen as a positive signal by investors. On the ex-date, the stock price is adjusted to reflect the split, but the total value of an investor’s holdings remains the same.”

Anil Goyal, Founder & Managing Director, CapSavvy said “A stock split is a tactful medium of enhancing the liquidity of a company’s shares by lowering their individual values but keeping the total investment amount constant. It refers to an increase in the number of shares whilst reducing the share prices in order to make them more affordable for any investor.”

“A common method of splitting stocks is the two-for-one or three-for-one approach. This means that if a shareholder owns one share before the stock split, he/she will now own two or three shares post the corporate action. It is a common measure actively pursued by companies since it does not affect the ultimate value of the business. Thus, it is a win-win situation for both investors and the company itself. Investors can easily afford to purchase shares priced at cheaper rates and the company’s market capitalization also doesn’t face a steep fall.” said Anil Goyal.

“A stock split possibly has a lot of advantages for the average investor of a company. If you were an investor, you would prefer buying 100 shares of INR 10 each as opposed to buying 1 share of INR 1,000. This is exactly what stock split focuses on, by making investing affordable with cheaper shares. Thus, investors can readily make up their minds to purchase the shares of the company in huge lots. Investors are more motivated to purchase shares without hesitation. Higher demand for company shares implies increased liquidity, which is another plus. Also, a huge number of shares involved in the trading regime means that there will be greater volumes of trading, resulting in increased economic participation in the nation,” stated Anil Goyal.

“The ex-date, better known as the ex-dividend date, marks the application of a stock split. It is the day when the shares of the company are split into a greater number of outstanding shares and the individual share prices are reduced as per the terms of the stock split,” said Anil Goyal.

Gaurav VK Singhvi, Co-founder, We Founder Circle said “A stock split is a corporate action wherein a company increases the number of its outstanding shares by issuing more shares to current shareholders. It improves trading liquidity and makes the stock seem more affordable. The number of outstanding shares increases and the price/share decreases proportionately, while the market capitalization and the value of the company do not change. The most common split ratios are 2-for-1 and 3-for-1 (a stockholder will have 2 or 3 shares, respectively, for every share held before the split).”

“A stock split happens for improving the liquidity of the shares. Normally what happens the price of the shares increases very much. For e.g. (hypothetically) an XYZ company – would have been a ₹10 share it would have been ₹20000 or ₹25000/share. Then the possibility of liquidity becomes less. Now, if the share is split in ₹1 share, it is trading at ₹2400, basically, it is more affordable for the people and more people can buy this. Typically, a stock split is done to #1 improve the liquidity of the share, and #2 optics-wise it looks affordable. So if you say that the ₹10/- XYZ share is ₹25000, nobody will be happy with the cost of the share. On the contrary, if you say it costs ₹2400, optic-wise it looks cheap. There are two things – #1 – it provides liquidity and #2 – optics-wise it doesn’t look costly. Companies introduce the stock split tool to increase the overall liquidity of the share and improve the overall cost. Normally, a share doesn’t cost more than ₹15000 or ₹20000 per share but when you split it, it eventually goes higher,” said Gaurav VK Singhvi.

“The date on which a stock starts trading without the benefit of corporate action, i.e., ex-benefit, is known as the ex-date. On the ex-date, the shares split into more shares and will start trading at a lower rate,” said Gaurav VK Singhvi.

Akanksha Verma, stock market investor said “A stock split acts like a catalyst, which neither adds new value nor dilutes the shareholders’ ownership stake. They do, however, increase the number of shares in the company. As far as investor benefits are concerned, investors would be willing to invest in those companies that are confident in this cutting-edge market scenario, so in general, it’s a good sign as it indicates that the company is confident about its future prospects and wishes to seek additional investment.”