Precision Wires soars 20% on fixing record date for stock split

The company has fixed December 23, 2021 as record date for stock split from Rs 5 to Re 1.

Shares of Precision Wires India soared 20 per cent to hit a record high of Rs 364.80 on the BSE in Tuesday’s intra-day trade after the company fixed December 23, 2021 as the record date for stock split from Rs 5 to Re 1 face value per equity share.

The stock surpassed its previous high of Rs 330.85 touched on November 11, 2021. At 02:40 pm; it was trading 18 per cent higher at Rs 360, as compared to 0.44 per cent decline in the S&P BSE Sensex. The counter had seen over 10-fold jump in trading volumes with a combined 1.06 million shares changing hands on the NSE and BSE.

In the past two months, the stock price of Precision Wires has zoomed 48 per cent after the company announced stock split plan. On November 3, 2021, the board of the company had approved the sub-division of company's one equity share of face value of Rs 5 each into five equity shares of face value of Re 1 each.

The company had said the rationale behind the stock split is to enhance the liquidity in the capital market, to widen shareholder base and to make the shares affordable to small investors.

As on September 30, 2021, Precision Wires had total 23.12 million outstanding equity shares. The promoters held 59.67 per cent stake in the company. The remaining 40.33 per cent holding were with individual shareholders (33 per cent), bodies corporate (3.24 per cent), Kcp Sugar And Industries Corporation Limited (1.52 per cent) and others (2.57 per cent), shareholding pattern data showed.

For the first half (April to September) of the current financial year 2021-22 (H1FY22), Precision Wires reported a strong 195 per cent year on year (YoY) growth in standalone net profit of Rs 26.55 crore against Rs 9.01 crore in H1FY21. Revenue from operations was too more-than-doubled or up 127 per cent to Rs 1,237 crore from Rs 545 crore during same period last fiscal.

The company's core activity is production and sale of only one product i.e. winding wires made of copper. In the longer term, the global themes of energy efficiency and reduction of carbon emissions will play in favour of industry.

Electric vehicle (EV) development is at a very early stage in India but is expected to pick up significantly during this decade - initially mainly in two and three wheelers and thereafter also four wheelers. The Government thrust on energy efficient electrical equipments would spur replacement demand of older less efficient equipments. After initial short term phase of Covid-19 pandemic, income will rise and change in lifestyles will spur demand for refrigeration, air-conditioning, home appliances and automotive sectors, Precision Wires said in FY21 annual report.