Dixon gains 5% after fixing March 19 as record date for 1:5 stock split

The rationale behind the stock split is to encourage wider participation of small investors and to enhance the liquidity of the equity shares at the stock market, the company said

Shares of Dixon Technologies, on Tuesday, climbed 5 per cent to Rs 19,999.90 on the BSE in intra-day trade after the company fixed March 19, 2021 as the record date for 1:5 stock split i.e. from Rs 10 to Rs 2. The stock of the consumer electronics company hit a record high of Rs 20,440 on February 25, 2021.

Dixon Technologies said the company, through postal ballot, has approved sub-division of equity shares of the company from 1 equity share having face value of Rs 10 each into 5 equity share having face value of Rs 2 each fully paid up. The stock will turn ex-date for stock split Mach 18, 2021.

The company's board of directors, at their meeting held on February 2, had approved the stock split. Generally, a company plans to go for a stock split to make the shares more affordable for small retail investors and increase liquidity.

Dixon Technologies said the rationale behind the stock split is to encourage wider participation of small investors and to enhance the liquidity of the equity shares at the stock market.

In the past one year, the stock of Dixon Technologies has rallied 365 per cent as compared to a 43 per cent rise in the S&P BSE Sensex. In the past six months, it has surged 115 per cent, against 33 per cent gain in the benchmark index.

Meanwhile, the company's management remains upbeat about medium- to long-term opportunities in domestic electronic manufacturing. With continuously achieving scale across the key segments, the company is also focusing on increasing backward integration to improve margin profile and customer stickiness.

In the wake of strong order book visibility and potential visibility in exports (Lighting), the company has announced further capacity expansion in Lighting, Semi-Automatic Washing Machines and CCTV cameras. Dixon’s execution capabilities and scale are leading to higher customer wallet share and customer pull from smaller contract manufacturers, analysts at Emkay Global Financial Services said in December quarter result update.