After Bharat Dynamics and Premier Explosives, These Could Be the Next Stocks to Split

The Indian share market has been abuzz with corporate action news in recent months.

In June 2024, several companies that saw their stock prices rally in the past one year opted for a stock split.

Premier Explosives, Bharat Dynamics, Bharat Bijlee, all of which are priced from around Rs 4,000 per share to Rs 10,000 per share (and more) opted for splits to make their shares more accessible to retail investors.

The attention is now turning to who could be next.

In this article, let's look at the strong contenders. Because in the month gone by, we have seen a steep rise in small-caps and mid-caps... and several high-priced companies among the lot have seen their stock prices double.

#1 The Yamuna Syndicate

First on this list is The Yamuna Syndicate.

This little-known company recently became the 2nd most highly priced stock (MRF being the first).

In a span of one month, the company's stock price has shot up from Rs 29,500 to Rs 62,500.

The company operates in various segments and supplies its products to a diverse category of industries from batteries and oil & lubricants to the auto industry to agricultural products and others.

The stock is only listed on the Bombay Stock Exchange and has a market capitalisation of Rs 19.2 billion (bn).

Interestingly, the company holds 45% stake in another listed engineering firm ISGEC Heavy Engineering out of its total 62.4% promoter holding.

The Yamuna Syndicate derives roughly 80% of its revenues from the auto ancillary segment of the business which comprises of batteries and oil and lubricants.

The company posted a strong growth in bottomline owing to auto ancillary sector seeing strong demand from the automobile original equipment manufacturers.

With the stock price reaching astronomical levels, the company could potentially consider going for a stock split and or bonus issue to make shares affordable for retail investors.

As of March 2024, Yamuna Syndicate's promoters hold 74.9% stake out of the total 307,365 outstanding shares.

The company has an average 52-week liquidity of Rs 0.53 million. In a single trading session, hardly less than 100 shares are traded on a daily basis.

To know more, check out our detailed report on Yamuna Syndicate.

#2 Bombay Oxygen Investments

Next up we have Bombay Oxygen Investments.

In a month, the company's stock price has surged over 68% from Rs 19,200 to Rs 32,160 at present.

The company's current marketcap stands at Rs 4,824 million and it has only 150,000 total outstanding shares.

The recent rally has raised eyebrows, and the Bombay Stock Exchange was quick enough to ask clarification from the company on the stock price movement.

To which the company said it has disclosed all the information and there is no pending announcement which may have a bearing on the price movement.

Nevertheless, that's what happens in a low free float stock if there's any specific news or development.

Out of the 150,000 shares outstanding, 73.29% are held with the promoters.

With such a steep rise seen in the past few trading session, it won't be a bad idea for the company to opt out for a stock split and make shares more affordable for retail investors.

In FY24, the company posted solid growth in its topline as well as bottomline. Net profit shot up to Rs 580 million compared to Rs 50 million last year while operating margin improved to 97%!

While it has stopped the primary business of manufacturing and supplying oxygen, it's got a good portfolio and holding in several listed companies including HDFC Life, L&T, SBI and other mutual funds.

Interestingly, the company's stock price had seen a similar rise not long ago in Jan 2021 when investors went all-in on anything even remotely associated with Oxygen during the pandemic shortage.

Bombay Oxygen's stock price shot up from Rs 10,000 on 25 March 2021 to Rs 24,500 on 21 April 2024. That's 2.5x in 25 days.

#3 Kaycee Industries

The final name on this list is Kaycee Industries.

The company manufactures industrial electrical switches, mechanical counters, electrical components, etc.

It's a subsidiary of another listed microcap company - Salzer Electronics.

Coimbatore-based Salzer Electronics had acquired 72.32% stake in Kaycee in an all-cash deal back in 2019.

Kaycee Industries provides solutions to various industries and sectors including power, panel builders, machine tool manufacturers, telecom, renewable energy, among others.

In the past few trading session, the company's stock price has seen a steep rise of over 30%, from Rs 45,616 to Rs 61,840.

The company has a marketcap of Rs 3,925 million.

As of March 2024, promoters of the company hold 73.5% out of the total 63,470 outstanding shares. That leaves less than 20,000 shares for retail investors.

The company has a 52-week average liquidity of Rs 1.52 million and less than 30 shares are traded on a daily basis.

Nevertheless, in the past one year, the company's stock price has ranged from Rs 10,000 to Rs 62,000, proving that a highly priced stock can still be an outperformer.

Recently, the company's board decided to split its shares and also announced bonus shares for the existing shareholders as of record date (6 July 2024).

In its board meeting held not long ago, the company approved the issue of bonus equity shares in the ratio of 4:1, meaning for every one equity held by the shareholders as on record date, four equity shares will be given to them.

Meanwhile, the stock split would be done in the ratio of 1:10.

The company saw a strong recovery in its operating margins in FY24. The entire annual performance isn't bad either. It posted the best ever numbers in FY24 and the company has zero debt on its books.

The company gets support from its established peer Salzer Electronics because both the entities operate under a common management and have significant business and financial linkages.

Salzer is the market leader in the cam-operated rotary switches segment.

Which Other Highly Priced Stocks Have Seen a Steep Rise?

Apart from the above three stocks, the below listed highly priced stocks have also seen a sharp jump in their stock prices in the past one month.

Company	Current Price	1-Month Change (%)
Polson Ltd.	15,604	15%
PTC Industries Ltd.	13,657	38%
TVS Holdings Ltd.	13,259	14%
Hitachi Energy India Ltd.	12,914	17%
GRP Ltd.	12,900	43%
Jamshri Realty Ltd.	11,700	20%
Bharat Rasayan Ltd.	11,613	13%

Source: Equitymaster

In Conclusion

Many companies offer a split of shares to make them more affordable to investors. At times, however, there may not be any visible logic for a stock split.

Companies that have outperformed the broader markets over several years with their strong fundamentals would not feel the need to bring in a greater number of shareholders to drive volumes or their stock prices.

Stock splits do not alter the financial fundamentals of a company. The ratios don't change, and the value of share capital also remains the same. So, a split doesn't provide any benefit to these companies.

On the contrary, these companies would prefer to keep a smaller investor base so that majority of voting rights remain within the company allowing them to make strategic decisions without any conflict.

Keeping prices higher also decreases volatility in the stocks hence lowering chances of any hostile takeovers or acquisitions.

Retail investors are often drawn towards buying stocks which are relatively low priced and tend to stay away from highly priced stocks.

Nevertheless, while investing in stocks, it is always wise to keep an eye not just on the company's stock price but also on the value of the stocks.

That's it for today, happy investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...