January 5, 2024

New Delhi, India

Nestle India Stock Split

Nestle India, a major FMCG player, has recently announced a significant move to undergo a 1:10 stock split, making waves in the stock market. The decision, approved by the board of directors, is set to impact share prices and affordability for investors.

Stock Split Details:

The board fixed the record date for the subdivision of stocks on 5th January 2024, where each existing share with a face value of ₹10 will be subdivided into ten shares with a face value of Re. 1 each. This strategic move is anticipated to enhance the accessibility of Nestle India shares for a wider investor base.

Impact on Share Price and Affordability:

As the stock started trading ex-split, Nestle India’s share price witnessed a dip of nearly 2%, opening at ₹2,657 on the BSE. The stock is expected to become more affordable for investors, potentially leading to increased trade volume. Post-split, the share price is likely to hover around ₹2,700 apiece.

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Financial Performance:

In Q2FY24, Nestle India showcased robust financial performance with a notable 36% YoY increase in profits, amounting to ₹908 crore. Revenues also experienced healthy growth, rising by 9.6% to ₹5036 crore. These positive results add a favorable backdrop to the stock split decision.

Ownership Changes:

The market dynamics have seen shifts in institutional ownership, with Foreign Institutional Investors (FIIs) reducing their stake from 12.38% in the June quarter to 12.1% in September 2023. Conversely, Domestic Institutional Investors (DIIs) increased their ownership from 9.05% to 9.32% during the same period.

Market Reaction and Outlook:

The stock split by Nestle India is expected to attract attention from both investors and market observers. The dip in share prices and the potential for increased trade volume make this development noteworthy. The company’s positive financial results further contribute to the optimistic outlook.

Conclusion:

Nestle India’s strategic decision to undergo a 1:10 stock split reflects its commitment to making shares more accessible to a broader investor base. As market dynamics continue to evolve, the impact of this move will be closely monitored for potential shifts in Nestle India’s stock performance.

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Disclaimer:

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