21 Feb , 2022 By : Kanchan Joshi
Shares of JBM Auto surged 5% to hit the upper circuit level on the BSE at Rs522 apiece in Monday's trading session. The multibagger stock started trading ex-split ahead of its record date i.e., 22nd February 2022, for its sub-division of shares or stock split in the ratio of 5:2.
"we wish to inform you that the company has fixed Tuesday, 22nd February, 2022 as the “Record date" for determining eligibility of members for the purpose of sub-division of the equity shares of the company from face value of Rs. 5/- each fully paid-up to face value of Rs. 2/- each fully paid-up," the company had said in an exchange filing.
Upon sub-division of face of value of each share from Rs5/- to Rs2/-, all fractions resulting from the sub-division of equity shares shall be consolidated into whole equity shares and the same will be disposed of at the market price and the net proceeds (less expenses, if any) will be distributed proportionately, as far as practicable, to the members concerned, JBM Auto said.
In December 2021, the company had informed that its board approved the proposal of sub-division of equity share or stock split of every equity share having face value of Rs5 into equity shares having face value of Rs2 each.
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. Stock split decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company.
A company engages in stock-split decision to make its stock more affordable if its price levels are very high, which in thus would lead to increase in liquidity in the stock.
0 Comment