Greenlam Industries zooms 18%, hits new high on stock split plan
Shares of Greenlam Industries zoomed 18 per cent hitting a new high of Rs 1,700 on the BSE in Friday’s intra-day trade in an otherwise weak market, after the company announced that its board will meet on December 13, 2021 to consider stock split from Rs 5 to Re 1 paid up.
The stock of surfacing solutions company has surpassed its previous high of Rs 1,595.95 touched on November 12, 2021. At 09:32 am; it was trading 16 per cent higher at Rs 1,673, as compared to 1.2 per cent decline in the S&P BSE Sensex.
A meeting of the board of directors of Greenlam Industries is scheduled to be held on Monday, December 13, 2021, inter alia, to consider and approve the proposal to sub-divide/split the face value of equity shares of the company from face value of Rs 5 per share to face value of Re 1 per share, the company said in an exchange filing.
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 stays the same. Existing shares split, but the underlying value remains unchanged. As the number of shares increases, the price per share goes down.
In the past six months, the stock price of Greenlam Industries has surged 45 per cent, as compared to 14 per cent rise in the S&P BSE Sensex. While, in one year, it has more-than-doubled or up 112 per cent, against 31 per cent gain in the benchmark index.
Greenlam Industries is a leading manufacturer of surfacing products with its flagship brands Greenlam Laminates, NewMika Laminates, Decowood Veneers, Mikasa Floors and Mikasa Doors & Frames.
For July-September quarter (Q2FY22), Greenlam posted strong volume growth of 45 per cent YoY led by a jump of 64 per cent/29 per cent YoY in domestic/export volume as the company continued to gain market share. However, sharply higher raw material cost, delay in passing on costs and loss in allied business impacted profit (~20 per cent lower than estimate). Going ahead, while volume growth is expected to remain strong, Greenlam expects margins to improve over coming quarters, the brokerage firm Edelweiss Securities said.