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India Nippon Electricals surged 10% to Rs 1,200 on BSE in early morning trade after the company said that its board will consider stock split and interim dividend. A meeting of the board of directors of the company will held on Monday the January 29, 2018 to consider the proposal of sub-division of equity shares of the company. “The board will also consider unaudited financial results of the company for the quarter ended 31st December 2017 and payment of an interim dividend for the year ending 31st March 2018,” India Nippon Electricals said in a statement. The rate, quantum, date of payment of interim dividend and the record Date, if declared, will be intimated soon after the meeting. The proposal of stock split will be subject to the approval of the shareholders, it added. A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.
This has the practical effect of increasing liquidity in the stock. The stock of auto parts & equipment Company has rallied 88% in past six months as compared to 8% rise in the S&P BSE Sensex. As of September 2017, India Nippon Electricals has total equity shares of 11.31 million of face value of Rs 10 each. Of these, around 7.5 million or 66.39% stake are with the promoters. At 09:54 AM; the stock was up 8% at Rs 1,184 against 0.04% decline in the benchmark index. A combined 67,227 shares changed hands on the counter on BSE and NSE so far.