This textiles company stock has zoomed 291% in 6 weeks since split

In past six months, the stock of Raghuvir Synthetics has zoomed 2623 per cent as against a 12.6 per cent gain in the S&P BSE Sensex

Shares of Raghuvir Synthetics were locked at the upper circuit for the 29th straight trading day, up 5 per cent at Rs 571.85 on the BSE on Thursday. Since October 28, 2021, in the past six weeks, the stock of the textiles company has zoomed 291 per cent after it turned ex-date for 1:10 stock split.

The company had fixed October 29, 2021 as the “record date” for the split/sub-division of equity shares of the company from face value of Rs 10 into 10 equity shares of Re 1 each (i.e. split of 1 equity share of Rs 10 into 10 equity shares of Re 1 each), which was approved by the board and shareholders in their respective meetings held on 10 August, 2021 and 15th September, 2021, respectively.

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 m-cap remains the same. Existing shares split, but the underlying value remains unchanged. As the number of shares increases, the price per share goes down.

As on September 30, 2021, Raghuvir Synthetics have total 3.87 million outstanding equity shares, shareholding pattern data shows. Of these, the promoters held 74.91 per cent or 29.02 million shares. The individual shareholders held 22.93 per cent stake, while the remaining 2.16 per cent are with bodies corporate (1.65 per cent) and others.

In the past three months, the stock price of Raghuvir Synthetics has surged 720 per cent, as compared to 0.28 per cent rise in the S&P BSE Sensex. Further, in the past six months, it zoomed a whopping 2,623 per cent as against 12.6 per cent gain in the benchmark index.

Currently, the stock is trading under ‘XT’ category on the BSE. XT consists of all those stocks which are only listed on BSE and are settled on a trade-to-trade basis. These stocks are not allowed for intraday trading.

Raghuvir Synthetics is engaged in the business to carry on all or any of the business of bleaching, dyeing, printing and processing work, finishing of cotton and blended of cotton textiles. The company operates as textile processing unit. The business of the company is to offer processing of fabrics.

To address industry challenges, the company has initiated for improvement several measures towards achieving organizational and operating efficiencies, alongside working on improvements in process and controls. The company said it has found export opportunities for the same line of textile products which they were doing Job work. The company has taken the lead towards the export in simultaneous with job work.

The above measure undertaken is expected to yield profits in measurable terms positive results in the coming years. While it is difficult to give precise figures, the above initiatives are expected to improve the financial performance of the Company, Raghuvir Synthetics said in the financial year 2020-21 (FY21) annual report.

Till 11:16 am; around 4,688 shares had changed hands on the BSE, as compared to an average 30,000 shares traded daily in in the past two weeks. There were pending buy orders for 106,202 shares on the BSE, exchange data showed.