HEG Ltd, a leading graphite electrode manufacturer, has announced the record date for its 5-for-1 stock split, sending its shares soaring by over 10% in early trading on Wednesday.
The company had earlier approved the stock split in the ratio of 1:5, with each existing equity share of face value ₹10 being split into five shares of ₹2 each. The record date for the stock split is set for September 30, 2024, the company informed the stock exchanges.
Key Highlights:
HEG Ltd announces record date for 1:5 stock split
Shares jump over 10% in early trade on the news
Split to be effective from September 30, 2024
Move aimed at improving liquidity and making shares more affordable
The stock split is expected to improve the liquidity of HEG’s shares and make them more affordable for retail investors. The move comes after the company reported a weak set of financial results for the June quarter, with net profit declining by 83% year-on-year to ₹23 crore.
HEG’s revenue for the quarter fell 15% to ₹571 crore, while EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) dropped by 73% to ₹38 crore. The company’s EBITDA margin also declined to 6.7% from 21% in the year-ago period.
Despite the weak financial performance, the company’s decision to split its shares has been well-received by the market. Shares of HEG were trading at ₹2,200, up 10.2%, on the BSE in early deals on Wednesday.
The stock split is expected to make HEG’s shares more accessible to a wider pool of investors, potentially leading to increased trading volumes and better price discovery. The move also aligns with the broader trend of companies undertaking stock splits to enhance shareholder value and attract more investors.
HEG’s stock has been on a roller coaster ride over the past few years. The shares hit an all-time high of ₹4,955 in October 2018 but have since fallen by nearly 60%. However, the stock has managed to recover some ground in 2024, rising 12% year-to-date and 25% over a 12-month period.
The company’s decision to split its shares is seen as a positive step towards improving its financial performance and enhancing shareholder value. Analysts believe that the move could also help HEG attract more institutional investors and improve its trading liquidity.
With the record date for the stock split set for September 30, 2024, existing shareholders of HEG will receive five shares for every one share held. The split is expected to be effective from October 1, 2024, subject to regulatory approvals.
Overall, HEG’s decision to split its shares has been well-received by the market, with investors betting on the company’s long-term growth prospects. The move is expected to improve the stock’s trading liquidity and make it more accessible to a wider pool of investors, potentially leading to better price discovery and enhanced shareholder value
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
