Shares of CESC rallied 10 per cent to Rs 96.75 on the BSE in intra-day trade on Friday after the 1:10 stock split came into effect. The company's board had fixed 17 September, 2021, as the record date for the stock split in the ratio of 1:10, i.e. a equity share with the face value of Rs 10 to be sub-divided into 10 equity shares with a face value of Re 1 each.
The stock of electric utilities company surpassed its previous high of Rs 92.61 (adjusted to stock split) touched on 11 January, 2018.
At 1:15 pm; the stock was trading 5.5 per cent higher at Rs 93 on the BSE, as compared to 0.23 per cent gain on the S&P BSE Sensex. A combined 14.24 million equity shares changed hands at the counter on the NSE and BSE. On an average, the counter used to witness trades of less than 1 million shares prior to the stock split.
On the rationale behind the stock split, CESC said the company intends to improve the liquidity of its shares in the stock market by reducing the nominal value of the shares through the process of sub-division.
CESC is a flagship company of the RP-Sanjiv Goenka Group. With its own power generation facilities, it is engaged in the business of distribution of electricity across 567 square kilometers of its licensed area in Kolkata, Howrah, Hooghly, North and South 24 Parganas in West Bengal.
While the demand outlook has improved, CESC is taking measures to mitigate risks associated with subdued sales volume. It is focusing on optimising costs and increasing non-tariff revenue by leveraging its reach in the market. In the medium to longer term, it also expects to benefit from greater adoption of electric vehicles and appliances, which it is actively promoting, the company said in the FY21 annual report.