After bonus and payouts, here come stock-splits

After the treat of bonus issues, hefty interim dividends, Indian promoters are now planning to heap the goodies on shareholders through stock-splits.

In the last three months alone, as many as 22 companies have proposed to reward shareholders with stock-splits.

Typically, in a stock split, the face value of shares is sub-divided into smaller denominations. This makes even high priced shares accessible to investors.

Since a split results in the market price falling immediately in the ratio of the split, the liquidity in the shares improves, thus opening the way for furtehr appreciation in the stock price.

Thirteen companies have already sub-divided their shares with a Rs 10 paid up value to lower denominations, while nine others have announced plans for stock splits.

In the pipeline are Nicholas Piramal, Mercator Lines, Matrix Laboratories, Marson's and Vijay Textiles.

Nicholas Piramal, Matrix Laboratories and Marson's have proposed to split its Rs 10 paid-up share into five shares of paid up value Rs 2 each.

Mercator Lines, Vijay Textiles and Doctor's Biotech have decided to split their equity shares of paid-up value of Rs 10 each into ten shares of Re 1 each.

Patel Engineering has proposed to sub divide its Rs 5 paid-up shares into five shares of Re 1 each. Earlier in January, 2001, the company had split the paid up value of its equity shares from Rs 10 each to Rs 5 each.

Berger Paints, Carborundum Universal, Sona Koyo Steering, Subhash Projects and Amtek Auto have already sub-divided their Rs 10 paid shares into five shares of Rs 2 each in the last five months.

Adani Exports, Premier Instruments and Shanti Gears are splitting their equity shares from Rs 10 paid up each to Re 1 paid up each and Perfect Circle has sub-divided its equity shares from Rs 8 paid to Re 1 paid up.

Jagsonpal Pharmaceuticals and Venlon Polyesters have sub divided their equity shares from Rs 10 paid up to Rs 5 paid up each.

Indian Hume Pipe and MICO have split their equity shares from Rs 100 paid up to Rs 10 paid up equity shares.

The market price of Subhash Projects appreciated by 27 per cent after the stock splits from Rs 16.41 (adjusted stock split price) on November 18,2004 to close at Rs 20.85 today.

Carborundum Universal, stock price jumped by almost 50 per cent from Rs 68 to Rs 102, after the company sub divided its equity shares from Rs 10 paid up to Rs 2 paid in August, 2004.

Most of the other companies market price increased by more than 30 per cent each after the stock splits.