This Small Cap Lubricants Co. Approves 5:1 Stock Split: Check Details

In the stock split the company divides its outstanding shares into multiples shares to boost the liquidity. Split in fact does not add any real value as the market value of the total outstanding shares of a company remains the same but market value of a single share is reduced in proportion to the number of shares extracted out of a single share. Likewise, here we will discuss the stock split that has been recently approved.

Savita Oil Technologies stock split

The company's board at its meeting held on June 21 has approved the following, subject to the approval of the Shareholders of the Company:

1. Sub-division of 1 (One) equity share of face value of Rs.10/- each into 5 (Five) equity shares of face value of Rs.2/- each.

2. Alteration in the Capital Clause 5 of the Memorandum of Association and Article 3 of the Articles of Association of the Company.

 

Rationale behind the split

"To encourage wider participation of retail investors and to enhance the liquidity of equity shares of the Company in stock market", mentioned the company's disclosures.

The stock split is expected to be completed within two months from the date of shareholder's approval.

 

About the company

Savita Oil founded in 1961 was initially set up to manufacture liquid paraffin as an import substitute. This was soon followed by the production of petroleum jelly in 1965. Then later the company after building its second manufacturing facility in the outskirts of Mumbai went on to manufacture petroleum specialties.

 

Company's financials and stock price trajectory:

The biggest strength of the firm is that it is a debt free entity with decent valuations. As against the sector P/E of 10.97, the stock is trading at a TTM PE of 6.03. On a standalone basis, the total revenue from operations at the firm is rising QoQ and for the March ended quarter stood at Rs. 794.3 crore as against Rs. 633.07 crore during the same period last year. Nevertheless, net profits at the concern have slipped from Rs. 94.53 crore in Q4Fy21 to Rs. 59.84 crore in the same period.

Coming to its stock, last the stock of the company traded at Rs. 1091.6 per share. The stock's 52-week low and 52-week high are Rs. 932 and Rs. 1830 per share, respectively. In the last 1-year, the stock has given a negative return of over 18%.

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