Ashish Kacholia-owned stock Fineotex Chemical witnessed a sharp 20% surge in Friday’s trading session as it turned ex-record and ex-date for the stock split and bonus share issue announced by the company.
The small-cap company earlier this week, on October 27, fixed the record date for its 1:2 stock split and 4:1 bonus share issue as October 31. Therefore, investors who wanted to enjoy the benefits of the corporate actions needed to buy the shares of Fineotex Chemical on or before October 30, as the Indian stock market follows the T+1 settlement system.
If an investor purchases shares today, they will reflect in their accounts on Monday, November 4, while the record date is Friday, October 31.
How many shares of Fineotex Chemical will an investor get?
Fineotex Chemical’s board had approved the subdivision of the equity share of face value of ₹2 each into two fully paid-up shares of ₹1 each. Alongside, they declared a 4:1 bonus issue, meaning four bonus shares of ₹1 each for each share held by the investor on the record date.
Assuming an investor held 50 shares before the record date, they will end up with 500 shares. Here’s the math:
Stock Split Impact
With a 1:2 stock split, the shares will double — 50 shares will become 100 shares. Now, an investor has 100 shares of face value of ₹1 each.
Bonus Issue Impact
Since the company is giving four additional shares for every share held, an investor with 100 shares will be rewarded with 400 shares. At the end of the day, they will have 100 + 400 = 500 shares.
However, investors must note that the value of their holdings will remain the same, as the stock split and bonus issue increase the number of shares but also reduce the price per share, making them more affordable for retail investors.
Fineotex Chemical share price trend
Fineotex Chemical, part of ace investor Ashish Kacholia, hit the day’s high of ₹29.80 apiece, up 20% over the previous close of ₹24.85.
Fineotex Chemical share price has rallied 35% in six months. However, on a year-to-date (YTD) basis, the scrip has lost 13% and is down 20% in the last one year.
Kacholia holds 30,00,568 shares of Fineotex Chemical as of the September quarter, representing a 2.62% stake in the company.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
