This PSU defense stock to turn ex-split on Friday; zooms 54% in 8 days

Bharat Dynamics had fixed May 24, 2024 as the record date for the purpose of determining the eligibility of shareholders for sub-division/ split of face value of equity shares from Rs 10 to Rs 5 each.

Bharat Dynamics (BDL) stock hit a new high at Rs 2,813.75, as it rallied 6 per cent on the BSE in Thursday's intra-day trade ahead of the 1:2 stock split on Friday. The stock of state-owned company was quoting higher for the eight straight day, zooming 54 per cent during the period.

BDL had fixed May 24, 2024 as the record date for the purpose of determining the eligibility of shareholders for sub-division/ split of existing 1 equity share of face value of Rs 10 into 2 equity shares with face value of Rs 5 each.

On the rationale behind the stock split decision, BDL said it was to comply with Department of Investment and Public Asset Management (DIPAM) Guidelines on Capital Restructuring; to encourage wider participation of small investors; and to enhance liquidity of the equity shares of the company in the stock market.

 

As of March 31, 2024, the Government of India, promoter of BDL, held 74.93 per cent stake in the company. Off the remaining 25.07 per cent - retail individual shareholders held 8.07 per cent stake, mutual funds (7.93 per cent), insurance companies (3.95 per cent), foreign portfolio investors (2.95 per cent), the shareholding pattern data shows.

In the past two months, the stock price of BDL appreciated by 69 per cent after the company's board on March 21 approved the sub division of equity shares. It bounced back 81 per cent from a low of Rs 1,552.15 touched March 14.

At 12:22 pm; BDL was trading 5.4 per cent higher at Rs 2,788.05, as compared to 0.75 per cent rise in the S&P BSE Sensex. The average trading volumes at the counter nearly doubled with a combined 2.4 million equity shares changing hands on the NSE and BSE.

BDL, one of the leading defence PSUs in India, is engaged in the manufacture of surface to air missiles (SAMs), anti-tank guided missiles (ATGMs), air to air missiles (AAMs), underwater weapons, launchers, countermeasures and test equipments.

Analysts believe the company is strongly placed to benefit from increasing capital outlay for indigenised defence platforms like missiles, torpedoes & Counter measure dispensing systems.

BDL manufactured Akash Air Defence System which has destroyed four unmanned targets simultaneously in operational field trials conducted by Indian Air Force on December 12, 2023. India has become the first country to demonstrate the capability of engagement of four (04) targets simultaneously by a command guided Missile.

BDL's future prospects appear promising, buoyed by a robust order book position and a stream of anticipated orders in the pipeline. In addition to that, the right support and policy initiatives from the Government of India further bolster the positive outlook ahead for the company.

As on January 31, 2024 the company’s order backlog was at Rs 20,070 crore (9x TTM revenue) provides healthy growth visibility. Orders pipeline also remains strong (in both domestic and exports) which includes various SAM (Surface to Air missile) variants including Akash NG, Quick Reaction (QRSAM) & Vertical launched Short Range (VLSRSAM), ATGM (Anti-Tank Guided Missile) like Helina/Dhruvastra, Nag, MPATGM, Smart Anti-Airfield Weapon (SAAW), Astra MK2, torpedoes etc. The strong pipeline provides more comfort on future growth visibility.