KNR Constructions hits 52-week high on stock split plan

The stock hit a 52-week high of Rs 765, up 5.5% on the BSE in an early morning trade

KNR Constructions hit a 52-week high of Rs 765, up 5.5% on the BSE in an early morning trade, after the company announced that the board will meet on Friday, September 30, to consider stock split in the ratio of 1:5.

“A meeting of the board of directors of the company is scheduled to be held on September 30, 2016, after the conclusion of the 21st Annual General Meeting of the company, to consider and approve the sub-division of the nominal value of the equity shares of Rs 10 per share to Rs 2 per share,” KNR Constructions said in a statement.

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.

KNR Constructions has total equity shares of 28.13 million shares, of which 60% or 17.09 million shares held by the promoters. Mutual funds held 23.76% stake followed by individual shareholders (8.49%) and foreign portfolio investors (3.95%) stake in the company.

In past four-months, the stock has outperformed the market by surging nearly 50% as compared to 11% rise in the S&P BSE Sensex.

At 09:54 am, the stock was up 5% at Rs 763 against 0.44% decline in the benchmark index. A combined 13,286 shares changed hands on the counter on the BSE and NSE so far.