IRB Infra gains 3% as board plans to mull stock split proposal on January 4

Shares of IRB Infrastructure Developers were up 3 per cent to Rs 322.50 in Tuesday’s intra-day trade, in an otherwise weak market, after the civil construction company announced that their board will meet on January 4, 2023, to mull stock split proposal. The board will consider sub division of face value of equity shares of the company from Rs 10 to lower denomination.

“A meeting of the board of directors of the company is scheduled to be held on January 4, 2023, to consider, inter-alia, a proposal for alteration in the share capital of the company by sub-division/split of existing equity shares having face value of Rs 10 each, fully paid up,” IRB Infra said.

The rationale behind the stock split is to facilitate larger shareholder base, increase liquidity, and to make the shares more affordable to investors.

A stock split is generally undertaken to make the stock more affordable to small retail investors and increase liquidity. It refers to splitting the face value of shares, in which the number of shares of the company increases but the market capitalisation stays the same. 

In the past one month, the stock of IRB Infra outperformed market, as they surged 29 per cent, as compared to nearly 1 per cent decline in the S&P BSE Sensex. In the past six months, it zoomed nearly 80 per cent, as against 19 per cent rally in the benchmark index. That apart, earlier, It had hit a 52-week high of Rs 329 on December 14, 2022.

IRB Infra is India’s first multinational infrastructure player in highway segment. As the largest integrated private toll roads and highway infrastructure developer in India, IRB has an asset base of over Rs 60,000 crore in 10 states across the parent company and two InvITs.

The company has strong track record of constructing, tolling, operating and maintaining around 15,500 lane kilometers pan India till date and ability to construct over 500 kilometers in a year. Moreover, after the successful completion of 13 concessions, IRB Group’s project portfolio (including Private and Public InvIT) has 22 road projects that include 17 BOT, 1 TOT and 4 HAM projects along with 1 Airport project in Sindhudurg District of Maharashtra.