“A meeting of the board of directors of the company will be held on November 05, 2016, to sub-divide the equity share of the company,” Sterling Tools said in a BSE filing.
The board will also consider and adopt the quarterly as well as half yearly unaudited financial results of the company for the quarter ended September 30, 2016, it added.
Stock splits are usually carried out to make the company’s stocks more affordable to retail shareholders, thereby widening the shareholder base, which in turn boosts the liquidity for these stocks.
They are usually announced when a company’s stock price reaches a certain price level, which makes it expensive for smaller shareholders to buy them. The move does not change anything fundamentally for the stock.
The market value of the company has been more than doubled in past four-months from Rs 467 on June 20, as compared to 4% rise in the S&P BSE Sensex.
The company have low equity base of 6.84 million shares, of these 70% or 4.8 million shares held by the promoters as of September 30, 2016, the shareholding pattern data shows.
At 10:43 am, the stock was up 14% at Rs 1,000 on BSE, against 0.14% decline in the benchmark index. The trading volumes on the counter jumped more than eight-fold with a combined 88,348 shares changed hands on the BSE and NSE so far.