Nestle India Share Price Sees a Dip Amidst 1:10 Stock Split
In the dynamic landscape of stock markets, Nestle India’s share price faced a downward trajectory in the early hours of Friday’s trading session, signaling the stock’s ex-split status. The opening bell echoed a bearish sentiment, with the share price touching an intraday low of ₹2,657 on the BSE, marking a nearly 2 percent decline from its Thursday closing figure of ₹2,711 per equity share.
The Impact of the Nestle India Stock Split
Market pundits predict heightened attention from investors and observers as Nestle India’s shares become more accessible post the stock split. The board of directors at Nestle India Limited earmarked 5th January 2024 as the record date for a significant subdivision, implementing a 1:10 ratio. Essentially, this implies that one Nestle India share, initially valued at ₹10 per equity share, will undergo subdivision into ten shares, each with a face value of Re 1 per equity share.
Nestle India’s Official Communication
In compliance with Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Nestle India communicated the stock split record date to the Indian stock market bourses. The official statement read, “The Company has fixed Friday, 5th January 2024, as the ‘Record Date’ for determining entitlement of Equity Shareholders for sub-division/split of existing Equity Shares.”
Implications for Investors
This strategic move by Nestle India Limited positions itself as a game-changer, making the sixth highest-priced stock in India more affordable. As a consequence, the anticipation is that trade volumes may surge, with Nestle India’s share price recalibrating to around ₹2,700 per share after the 1:10 stock split. The stock concluded Thursday’s trading session at ₹27,150 per share on the NSE.
Expert Recommendations: Buy or Sell?
In the wake of this development, financial expert Vaishali Parekh offers insights into three stocks recommended for purchase on January 5. Amidst the stock split, Nestle India’s Q2FY24 results showcased a remarkable 36 percent year-on-year surge in profits, reaching ₹908 crore. Simultaneously, revenues experienced a healthy growth of 9.6 percent, amounting to ₹5036 crore.
Shifting Investor Landscape
During the September 2023 quarter, Foreign Institutional Investors (FIIs) exhibited a marginal reduction in their stake in Nestle India, declining from 12.38 percent in the preceding June quarter to 12.1 percent. Conversely, Domestic Institutional Investors (DIIs) increased their ownership from 9.05 percent to 9.32 percent over the same period.
In conclusion, the Nestle India Stock Split 2024 not only reshapes the share price dynamics but also sets the stage for increased investor participation. As the stock becomes more accessible, the market witnesses a recalibration that could potentially influence trading volumes and investor sentiments.
