1:2 Stock Split Soon: Green Energy Stock Turns Rs 40,000 To Rs 7,31,886 Thanks To 2 Bonuses In 18 Months; BUY?

KPI Green Energy stock price has witnessed broadly bearish tone in the last month as investors cashed in gains. However, the stock is still trading at a higher levels compared to its 52-week low. In fact, KPI Green has journeyed from a little over Rs 300 to even higher Rs 2,100 level in a span of less than 18 months. The stock has turned Rs 40,000 to over Rs 7.3 lakh since 2023 to date, thanks to its bonus issue. And there is more rewards ahead.

On BSE, KPI Green Energy stock ended at Rs 1834.30 apiece, last on Friday, down by 0.6% with a market cap of Rs 11,057.64 crore. The weekly performance was down by 1%. On a month-on-month basis, KPI Green slipped by over 4.1%.

Despite the monthly drop, bulls have broadly stayed in KPI Green so far in 2024. Year-to-date, the stock is up by 93% on BSE. In six months, KPI even gives over 100% aka 2x returns to its investors. In a year, the stock is up by 327.51%.

However, KPI Green's 52-week low is at Rs 427.58 apiece, which was witnessed on June 20 2023. The stock touched its 52-week high of Rs 2,109.25 apiece on April 25, 2024, before correcting.

Before the 52-week high, KPI Green turned ex-bonus for a 1:2 ratio on February 15, 2024. This will be the second bonus issue by KPI since 2023. In January 2023, the company delivered bonus shares of a 1:1 ratio. KPI Green's share price was at Rs 300.50 apiece on the 1st of January 2023.

Here's where the two bonus shares will play a role in multiplying investors' money in KPI Green significantly.

Example:

For instance, let's say an investor bought KPI Green shares for Rs 40,000. The number of equity shares will be 133 at Rs 300.50 apiece on January 1, 2023. If these shares are held on the first bonus issue by the company, then your 133 shares will double in the ratio of 1:1. Meaning, 1 bonus share is free on 1 existing equity share. Hence, 133 will receive 133 bonuses, taking the total number of shares to 266 equity shares.

If the 266 shares are further held till the second bonus issue of 1:2, where you would receive 1 bonus share free on every 2 existing equity shares. Then 266 shares will get another 133 shares (266/2), taking the total of 399 equity shares.

If these 399 equity shares were held during the time KPI Green touched a new 52-week high then the corpus would be around Rs 8,41,590.75. While on the current market price, the 399 equity shares are valued at Rs 7,31,885.7.

Ahead, a stock split will be another driving factor to the portfolio.

KPI has announced stock sub-division in the ratio of 1:2. It would mean that 1 equity share having a face value of Rs. 10/- (Rupees Ten only) each, fully paid-up, will be sub-divided into 2 (Two) equity shares having a face value of Rs. 5/- (Rupees Five only) each, fully paid up at KPI Green. The record date will be announced soon.

If we take the same example, 399 equity shares if held at the time KPI Green turned ex-split for the first time in the ratio of 1:2, then 399 shares will be 798 equity shares (399X2).

Furthermore, KPI is set to pay dividend rewards as well. The company has announced a final dividend of 2% i.e. Re. 0.20 (Twenty Paisa only) per equity share of the face value of Rs.10/- each for the financial year 2023-24, subject to the approval of the Shareholders at the ensuing Annual General Meeting of the Company.

Should You Buy KPI Green Shares? As per Trendlyne data, the consensus recommendation from 1 analyst for KPI Green Energy Ltd. is STRONG BUY. The 1-year average target price in KPI is at Rs 2,199, hinting at a 20% potential upside ahead. EPS is expected to grow by 114.9% in FY25

KPI Green Energy Limited (Formerly known as K.P.I. Global Infrastructure Limited), is the Renewable vertical of KP Group and a prominent Gujarat-based Renewable power generating company. Incorporated in February 2008, focused on providing Renewable power through different Business verticals.