Nestle board approved a stock split in the ratio of 1:10 on October 19 for the first time in India. This means each share that an investor holds will be subdivided into 10 shares.
“Sub-division/ split of each equity share of face value of ₹10 each, fully paid-up into 10 equity shares of face value of ₹1 each, fully paid-up by alteration of Capital Clause of the Memorandum of Association of the Company, subject to the approval of the members of the Company to be sought by means of Postal Ballot,” the firm said in an exchange filing.
The record date for sub-division or split of existing equity shares will be intimated later, the company added.
Following the announcement, alongside September quarter results, Nestle India shares recovered from the day’s lows to trade in the green. The stock has given a return of nearly 20% in 2023 (year-to-date) as against the benchmark Sensex which has risen a little over 7% during the period. However, in the six-month period, the stock is down 10%.
Nestle India’s stock priced at ₹23,325 per share is the seventh highest-priced Indian stock, which may make it unaffordable for several investors. Now that the stock will be split, more investors or traders will be able to place their bets.
This is the first time the company has announced a stock split in at least two decades.
Nestle India is the India unit of Nestle S.A. and is involved in the manufacturing of branded milk products and other food products. It is also known for manufacturing Maggi noodles, soups and sauces.
Nestle also reported quarterly results for the July to September quarter, in which its net profit rose to ₹908 crore, beating the CNBC-TV18 poll projection of ₹805 crore. The profit has come in nearly 38% higher than the corresponding quarter in the previous financial year.
While the company's margin increased to 24.3% from 22.1% in the same quarter a year ago, its operating profit or earnings before interest and taxes (EBIT) came in 21% higher year-on-year at ₹1,225 crore. The firm's revenue has risen 9.5% to ₹5,036 crore for the quarter ended September.
Nestle India shares were trading half a percent higher at ₹ 23,380 on BSE at 11:17 am.
(Edited by : Amrita)
First Published: Oct 19, 2023 11:27 AM IST
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