On October 18, HEG Ltd’s shares experienced a 5% decline, hitting a day’s low of ₹488.10 on the Bombay Stock Exchange (BSE) as the stock began trading on an ex-split basis. This decline followed the company’s announcement that October 18 would serve as the record date for a 1:5 stock split, allowing shareholders to receive five shares for every one they own. HEG had previously communicated this split in a regulatory filing, stating: “We wish to inform you that the Company has fixed Friday, October 18, 2024, as the ‘Record Date’ for determining entitlement of Equity Shareholders for the purpose of sub-division/split of existing Equity Shares of the Company.” Each fully paid-up share with a ₹10 face value will be divided into five shares with a ₹2 face value, all shares ranking pari passu in every respect.
A stock split reduces the face value of each share while increasing the number of shares held by shareholders, ultimately not affecting the total value of their investment. For example, an investor with 10 shares prior to the split will now hold 50 shares, though the overall value remains unchanged.
This stock split is HEG Ltd’s first, according to available data from Trendlyne, and comes after a strong market performance. Over the past year, the stock has gained 42% and has risen by 28.5% in 2024. In the last two years, HEG’s stock price has more than doubled, providing investors with a remarkable 123.6% return.
In addition to the stock split, HEG Ltd announced a board meeting scheduled for November 13, 2024, to consider and approve the quarterly and half-yearly results for the period ending September 30, 2024. Despite the initial drop in stock price due to the split, HEG Ltd shares managed to recover some losses, trading at ₹501, reflecting a 2.5% decline by 1 PM on the National Stock Exchange (NSE).
For the financial year ending March 2024, HEG Ltd declared a substantial equity dividend of 225%, amounting to ₹22.5 per share. At the current share price of ₹497.75, this results in a dividend yield of approximately 0.9%.
Historically, HEG has undertaken other corporate actions, including a bonus share issuance in 1994 at a 1:1 ratio, where shareholders received one additional share for every share owned. The last bonus shares went ex-bonus on November 25, 1994. Additionally, in 1992, HEG issued rights shares in a 5:8 ratio with a premium of ₹30 per share, which went ex-rights on June 26, 1992.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. The content presented herein reflects the author’s opinions and should not be taken as a recommendation to buy, sell, or hold any securities. Investors should conduct their research and consult with a financial advisor before making any investment decisions. Past performance does not indicate future results, and all investments carry risk, including the potential loss of principal.
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