Upcoming Stock Splits: Analyzing High-Priced Stocks Ready for a Split

The Indian share market has been dynamic with significant corporate actions in recent months. In June 2024, several high-priced stocks such as Premier Explosives, Bharat Dynamics, and Bharat Bijlee executed stock splits to make their shares more accessible to retail investors. This move has sparked interest in which companies might be next to follow suit. This article examines potential candidates for upcoming stock splits, especially focusing on small-cap and mid-cap companies that have experienced significant price hikes recently.

1. The Yamuna Syndicate

Overview

The Yamuna Syndicate, a lesser-known but high-priced stock, has caught investors’ attention by becoming the second most expensive stock in India, just behind MRF. The company’s stock price soared from ₹29,500 to ₹62,500 within a month.

Business Segments

The company operates across multiple segments, supplying products to industries such as batteries, oil & lubricants, the auto industry, and agriculture. It derives approximately 80% of its revenue from the auto ancillary segment, which includes batteries and lubricants, driven by strong demand from automobile manufacturers.

Market Position and Ownership

Listed only on the Bombay Stock Exchange, The Yamuna Syndicate has a market capitalization of ₹19.2 billion. The promoters hold a significant 74.9% stake in the company, out of a total of 307,365 outstanding shares.

Potential for Stock Split

Given the astronomical rise in stock price, The Yamuna Syndicate might consider a stock split to enhance liquidity and make its shares more affordable to retail investors. With a 52-week average trading liquidity of ₹0.53 million and daily trading volumes often below 100 shares, a split could stimulate trading activity and attract more investors.

2. Bombay Oxygen Investments

Overview

Bombay Oxygen Investments has seen its stock price jump by 68% in a month, from ₹19,200 to ₹32,160. With a market capitalization of ₹4.824 billion and only 150,000 outstanding shares, the company's stock price movement has garnered attention, prompting inquiries from the Bombay Stock Exchange.

Business Transformation

The company, which previously focused on manufacturing and supplying oxygen, now holds a robust investment portfolio in companies like HDFC Life, L&T, and SBI, along with mutual funds. Despite ceasing its primary business, Bombay Oxygen posted impressive financial growth in FY24, with net profit rising to ₹580 million from ₹50 million the previous year, and an operating margin of 97%.

Stock Split Potential

With 73.29% of its shares held by promoters, the company has a low free float, which could benefit from a stock split. Such a move would make the shares more accessible to retail investors and possibly reduce volatility in stock price movements.

3. Kaycee Industries

Overview

Kaycee Industries, a manufacturer of industrial electrical switches and components, has experienced a 30% rise in its stock price recently, climbing from ₹45,616 to ₹61,840. The company, a subsidiary of Salzer Electronics, has a market capitalization of ₹3.925 billion.

Market and Ownership

As of March 2024, the promoters hold 73.5% of the company’s 63,470 outstanding shares, leaving fewer than 20,000 shares available to retail investors. With a 52-week average liquidity of ₹1.52 million and less than 30 shares traded daily, the stock’s high price range has spanned from ₹10,000 to ₹62,000 over the past year.

Recent Developments

Kaycee Industries has already decided to split its shares and announced bonus shares for existing shareholders. The stock split will occur in a 1:10 ratio, and bonus shares will be issued in a 4:1 ratio. This move aims to enhance liquidity and attract more investors.

Other Noteworthy High-Priced Stocks

Apart from the above-mentioned stocks, several other high-priced stocks have seen substantial price increases in the past month, including:

• Polson Ltd.: Current Price ₹15,604, 1-Month Change 15%

• PTC Industries Ltd.: Current Price ₹13,657, 1-Month Change 38%

• TVS Holdings Ltd.: Current Price ₹13,259, 1-Month Change 14%

• Hitachi Energy India Ltd.: Current Price ₹12,914, 1-Month Change 17%

• GRP Ltd.: Current Price ₹12,900, 1-Month Change 43%

• Jamshri Realty Ltd.: Current Price ₹11,700, 1-Month Change 20%

• Bharat Rasayan Ltd.: Current Price ₹11,613, 1-Month Change 13%

In Conclusion, Stock splits are often implemented to make shares more affordable and increase liquidity. While stock splits do not change the fundamental value of a company, they can attract a larger investor base and potentially reduce stock price volatility. For companies with high-priced stocks, such as The Yamuna Syndicate, Bombay Oxygen Investments, and Kaycee Industries, stock splits can be a strategic move to enhance market participation and trading activity. Investors should keep a close watch on these companies as potential candidates for the next wave of stock splits in the Indian market.