1:10 Stock Split: 500 Shares Of This BSE-Listed Multibagger Steel Company Will Soon Multiply To 5,000 Shares

Dhatre Udyog, a BSE-listed penny stock, trading at a little over Rs 200 per share, has received the board of directors' approval for carrying a stock split in the ratio of 1:10. This means that every 1 existing share of Dhatre Udyog will be sub-divided into ten new shares, bringing down its face value, market price level, and becoming even more cheaper for new and existing investors.

On BSE, Dhatre's share price is at Rs 210.50 apiece, down by 5% on Thursday with a market cap of Rs 229.35 crore.

Dhatre shares' 52-week high and low levels are at Rs 317.25 and Rs 73.90 respectively. And even despite the latest drop, the share is still trading higher by 185%.

In a meeting held on February 8, Dhatre Udyog's board considered and approved the proposal for sub-division of 1(one) equity share of the Company having a face value of Rs 10/- each into 10 (Ten) equity shares having a face value of Rs 1/- each, subject to regulatory/statutory approvals as may be required and the approval of the
shareholders of the Company.

Hence, the stock split ratio is 1:10.

Further, the company said, the record date for the sub-division of equity shares shall be decided by the Board and will be intimated to the exchange.

So let's assume, an investor holds 500 shares of Dhatre Udyog. Once the stock split takes place, these 500 shares will multiply to a whopping 5,000 shares (500X10).

Typically, listed companies declare a stock split of already owned shares into much smaller shares. This is done to improve liquidity by breaking the shares into smaller sizes. The face value of the shares reduces in proportion to the split ratio, however, there is no impact on the company's share capital and reserves. Although the price value of a stock reduces in a stock split, the number of shares held rises in the investors' portfolio of that specific stock.

During Q3FY24, the company reported a net profit of Rs 3.62 crore, higher from Rs 1.24 crore in Q3FY23 and Rs 1.92 crore in Q2FY24. Further, the company reported revenue from operations to the tune of Rs 54.33 crore in Q3FY24, as compared to Rs 42.42 crore in the same quarter a year ago, and Rs 38.92 crore in the preceding quarter.

Established in 1996, Dhatre Udyog Limited (DUL) stands as a distinguished industry leader, recognized for its exceptional production of top-tier TMT bars. With an unwavering commitment to excellence, it consistently produces high-quality products that comply with global standards. Since its inception, the company has exhibited exponential growth, earning unwavering trust within the industry.

Dhatre Udyog proudly upholds a legacy of expertise in crafting premium Steel and Iron Products catering to core industries. Through seamless integration of cutting-edge technology and seasoned professionals, the company consistently meets stringent global industry standards. Using extensive experience and a pool of experts, it continually strives to improve infrastructure and foster sustainable growth. The securities of the Company are listed on BSE.

Disclaimer: The stock just highlights the stock split and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.