SME stock drops 5% on BSE ahead of 2:1 bonus issue, 10:1 stock split ex-date
Captain Pipes, is an SME stock on BSE and on Thursday it dropped by 5% ahead of the ex-date for bonus issue and stock split. During the trading session, the stock had even touched a lower circuit. This would be the third consecutive downside in Captain Pipes.
On BSE, Captain Pipes’ share price closed at ₹705 apiece down by ₹35 or 4.73%. Earlier, in the trading session, the stock touched a 5% lower circuit of ₹703 apiece.
The company’s market cap is around ₹327.72 crore currently.
Earlier, the company revised its record date for the 2:1 bonus issue and 10:1 stock split on March 3rd from the previously scheduled March 2nd. The ex-date is also the same as the record date.
That means, shareholders whose names will appear in the company’s register by end of trading hours on March 3rd will be eligible for the stock split and bonus issue benefits.
Stock split:
Under 10:1 stock split, the company will sub-dividend 1 equity share having a face value of ₹10 each — into — ten equity shares having a face value of Re 1 each.
In its regulatory filing, Captain Pipes said the stock split is carried out to “enhance the liquidity of Equity Shares and widen the shareholders base by making the Equity Shares more economical to the investors.”
Pre-stock split, the total share capital is around 46,48,560 equity shares. This will rise to nearly 4.65 crore equity shares post-stock split.
A stock split will also lead to a reduction in the current market price, making it cheaper for investors.
Bonus issue:
In the 2:1 bonus issue, the company will issue two equity shares for every 1 existing equity share held as of the record date.
A total of nearly 9.3 crore equity shares having a face value of Re 1 each are proposed to be issued under the bonus equity shares program. That being said, the company requires ₹9.3 crore for implementing the bonus issue.
As of September 30, 2022, the company has free reserves of over ₹4.82 crore and securities premiums of nearly ₹7.24 crore.
In the pre-bonus shares issue, the share capital of the company would be 4.65 crore equity shares — which will rise to nearly 13.95 crore equity shares in the post-issue.
The company plans to complete the bonus issue by March 27, 2023.
Captain Pipes is a manufacturer and exporter of uPVC column pipes, uPVC plumbing pipes and fittings, CPVC plumbing pipes and fittings, Casing pipes, and PVC pressure pipes in India, Gujarat.
Currently, the company has a state-of-the-art manufacturing facility spread over an area of 62,000 sq. ft with a production capacity of 17,700 metric tons per annum.
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