1:2 Stock Split, 5900% Returns: Midcap Marine Stock In Focus On Plans Of Fund Raising, Stock Split; BUY?

The shares of Knowledge Marine & Engineering Works (KMEW) surged up to 6% to Rs 2,294 during Tuesday's intraday trading on the Bombay Stock Exchange (BSE), as the company announced raising capital for expansion.

The key highlight of KMEW's announcement was its board's approval of a stock split in a 1:2 ratio. This means each existing equity share with a face value of Rs 10 will be subdivided into two shares with a face value of Rs 5 each, fully paid up. The move is subject to shareholder approval.

The company justified the stock split as a measure to enhance liquidity in the capital markets, attract a broader base of shareholders, and make the shares more affordable for smaller investors. The announcement has already spurred increased trading activity and investor interest in KMEW shares.

In addition to the stock split, KMEW's board approved plans to raise Rs 500 crore through various equity-linked instruments. The capital could be mobilized through a mix of public or private offerings, preferential allotments, qualified institutional placements (QIPs), or convertible securities like debentures and warrants.

The infusion is expected to support the company's growth ambitions, including expansion of its fleet, technological advancements, and diversification of its marine services portfolio.

About Knowledge Marine & Engineering

Knowledge Marine & Engineering Works is a leading Indian player in marine services. Its operations span owning, chartering, and maintaining marine crafts. The company also provides manning, technical maintenance, dredging, and repair services, alongside allied marine infrastructure works within India.

Financial Performance

While the company made strides on the market front, its second-quarter FY25 financial results reflected some challenges. KMEW's consolidated revenue declined 10.4% to Rs 95.62 crore, compared to Rs 106.8 crore in the same quarter last year. The company's net profit also fell 3.9% to Rs 23.46 crore, down from Rs 24.42 crore year-on-year.

Stock Performance

KMEW's stock has been a stellar performer in the equities market, outpacing broader indices significantly. Over the last six months, the stock has surged 62%, compared to the 1.8% rise in the BSE Sensex. Over the last year, KMEW shares have gained 48%, while the Sensex advanced by 10.7%.

At 3:25 pm on Tuesday, the stock was trading at ₹2,201.10, up 1.76%, against the BSE Sensex's marginal decline of 0.11% at 78,454.24. The company's market capitalization now stands at Rs 2,387.02 crore.

The dual announcements of a stock split and capital raise come at a pivotal time for KMEW. By making its shares more accessible to retail investors, the company aims to widen its shareholder base. Simultaneously, the Rs 500 crore fund-raising plan reflects its intent to scale operations and explore new opportunities in the marine and infrastructure sectors.