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Home / Markets / Stock Markets /  Hindustan Foods shares rally 16%, hit 52-week high after 1:5 stock split
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Shares of Hindustan Foods Ltd rallied more than 16%, hitting a 52-week high of 479 apiece on the BSE in Thursday's early deals as the company started trading ex-split, a day ahead of its record date for stock split in the ratio of 1:5. Earlier this month, the company announced that it has fixed the record date for its sub division of shares on Friday, July 22, 2022.

In May, the company informed that its board “approved the proposal of Sub-Division/ Split of existing 1 (One) Equity Share of face value of Rs. 10/- (Rupees Ten Only) each fully paid up into 5 (Five) Equity Shares of Rs. 2/- (Rupees Two Only) each fully paid up, subject to the approval of the members of the company and other authorities, if required."

Explaining the rationale, Hindustan Foods said that stock split decision is to encourage wider participation of retail investors by making the Equity Shares more affordable for them and to enhance the liquidity of Equity Shares of the Company in the stock markets.

A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. Stock split decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company.

A company engages in stock-split decision to make its stock more affordable if its price levels are very high, which would lead to increase in liquidity in the stock.

Hindustan Foods is a contract manufacturing FMCG company. Its product range covers food & beverages, beauty & personal care, leather, sports footwear & accessories, home care, health & wellness and pest control.

For the quarter ending March 2022 or Q4FY22, the company posted net profit of 12 crore as against of 12.9 crore in the corresponding quarter of the previous fiscal. It reported total income of 582.5 crore during the period as compared to 492 crore in the year-ago quarter.

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