Agra Wealth Management：10：1 Stock Split Announced： One Rs 44 Textile Penny Stock To Split Into Ten Small Shares; Rises 127% In 1-Year

Nandan Denim, a textile company with penny stock status, has announced a share split in the ratio of 10:1. This penny stock is currently below Rs 45, and will soon become even more cheaper for both new and existing investors. The stock is a multi-bagger with gains of over 127% in a year.Agra Wealth Management

In a board meeting held on June 17, Nandan received the approval for stock sub-division in the ratio of 10:1. This means that 1 equity share having a face value of Rs 10 each will be sub-divided into 10 equity shares having a face value of Rs 1 each.

This is subject to the approval of shareholders of the company and other statutory regulatory authorities, as may be required. Nandan said, "In this respect, the record date for subdivision/split shall be intimated to the Stock Exchanges in due course."

Usually, in a stock split, the face value reduces while the number of shares in an investor's portfolio rises. However, the share capital remains the same in the stock split process.

For instance, Nandan is currently at Rs 44.02 apiece on BSE. So this is 1 equity share of Rs 44.02 with a face value of Rs 10 each. Post the stock split, this 1 share will be subdivided into 10 equity shares with a face value of Rs 1 each which will lead to the share price of Rs 4.402.

Now, pre-stock split, the share capital is Rs 44.02, which will still be the same even on adjusting to the 10:1 split ratio because 10 X Rs 4.402 is still equal to Rs 44.02.

However, this is just an example, the price of Nandan is likely to change going forward with market risks and sentiments.

The reason behind the stock split by Nandan is to improve the liquidity of the Company's equity shares in the stock market and to make it more affordable to small retail investors.

The stock split is expected to be completed within the prescribed timeline specified in this regard, if any, under the Companies Act, 2013 and rules made thereunder and/or SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Last week, on Friday, the stock price ended at Rs 44.02 apiece, down by 0.7% on BSE with a market cap of Rs 634.54 croreBangalore Investment. The stock is still closer to its 52-week high of Rs 48.51 apiece and has nearly doubled from its 52-week low of Rs 17.26 apiece.

With a low PE of 14.11x and RoE of 7.68%, Nandan Denim's share price has surged by 56% on BSE year-to-date, while the upside is a whopping 127.37% in a year. All-time gains of Nandan Denim is 753.40%.

Nandan Denim Limited (NDL) is India's leading and the world's fourth-largest integrated denim fabric maker. The company commenced its operations in 1994 with a textile trading business and forayed into textile manufacturing in 2004. Nandan Denim currently engages in the manufacturing of denim fabric, shirting fabric and yarn.

NDL is part of a leading conglomerate, Chiripal Group, established in 1972 and is currently diversified across several businesses like Textiles, Chemicals, Packaging, Infrastructure and Education.