The board of directors of a small-cap company in the telecom sector recently announced the record date for a 1:5 stock split. At 02:30 PM, its shares were trading at ₹ 868.00 apiece on the Bombay Stock Exchange (BSE).
Avantel in an exchange filing said that its board has fixed August 16, 2023, as the record date for determining the eligibility of its shareholders for the purpose of a stock split/ sub-division of its equity shares in the ratio of 1:5. Therefore, each share having a face value of ₹ 10 each will be sub-divided into five shares having a face value of ₹ 2 each, fully paid.
Avantel is engaged in the business of designing, developing and maintaining wireless and satellite communication products, defence electronics, radar systems and the development of network management software applications for its customers majorly from the aerospace and defence sectors.
In the past six months, the company’s share price increased by 116 percent from ₹ 401.90 to the current level, delivering multibagger returns. Therefore, an investment of ₹ 1 lakh in the company’s shares would be worth ₹ 2.16 lakhs today!
Moreover, in the past year, the company has delivered multibagger returns of 205 percent, as its share price increased from ₹ 284.25 to the current level. Therefore, an investment of ₹ 1 lakh in the company’s shares would be worth ₹ 3.05 lakhs today!
With a market capitalization of ₹ 1,402 crores, Avantel is a small-cap company. It has a high return on equity of 28.25 percent and an ideal debt-to-equity ratio of 0.26. Its shares were trading at a price-to-earnings ratio (P/E) of 46.00, which is higher than the industry P/E of 22.88, indicating that the stock might be overvalued as compared to its peers. The company’s promoters hold a 40.10 percent stake in it, while retail investors hold 59.90 percent.
Written by Simran Bafna
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