Kajaria Ceramics hits record high on stock split plan

In past nine-months, the stock of Kajaria Ceramics zoomed 69% compared to 5% rise in the Nifty 50 index.

Kajaria Ceramics has moved higher 4% to Rs 1,150, also its record high on the National Stock Exchange (NSE), after the company announced that board will meet June 16, to consider stock split of equity shares of the company of face value of Rs 2 each into Re 1 each.

“A meeting of the board of directors of the company will be held on June 16, 2016, to consider and approve the sub-division of the shares from Rs 2 each fully paid up to Re 1 each fully paid up,” Kajaria Ceramics said in a statement.

Stock split or sub-division of equity shares is meant to infuse liquidity and make shares affordable for retail investors who could not invest earlier due to the high stock price.

A share split itself does not increase the economic value of a company, but it can increase the shareholder base — making it easier for both retail and institutional investors to buy stocks.

In past nine-months, the stock of Kajaria Ceramics zoomed 69% from Rs 682 on September 2, 2015 compared to 5% rise in the Nifty 50 index.

Earlier in October 19, 2005, the company had sub divided the face value of its equity shares from Rs 10 each to Rs 2 each. Since then, the stock appreciated almost 25 times from Rs 46 (adjusted to stock split) against 3.3 times gain in the benchmark index.

At 11:13 AM, the stock was up 3.4% at Rs 1,146 as compared to 0.17% fall in Nifty 50. A combined 97,266 shares changed hands on the NSE and BSE.