Motisons Jewellers stock split

Motisons Jewellers Announces 1:10 Stock Split – Record Date & Key Details

19, 2024. This means that each existing equity share with a face value of ₹10 will be subdivided into ten shares, each with a face value of ₹1. The company set November 9, 2024, as the Record Date to determine which shareholders will be eligible for the split. Following the announcement, the stock dropped by approximately 4%, hitting a low of ₹268.

Key Developments:

1. Stock Performance: Despite the recent decline, Motisons Jewellers’ stock has been a multibagger since its IPO, appreciating over 387% from its IPO price of ₹55. Year-to-date in 2024, the stock has rallied 173%, with a 60.5% rise in September and a 15% rise in August.
2. Warrant Issuance: In August 2024, the company’s board approved the allotment of 10 million fully convertible warrants at ₹170 per share, raising ₹170 crore to support long-term growth and business expansion.
3. Jewellery Market Outlook: The company remains optimistic about the jewellery market, which is projected to grow globally at a CAGR of 3.53% from 2024 to 2028, with India being a major contributor to this growth.

Advantages of Stock Split:

1. Improved Liquidity: A stock split increases the number of shares available, which may lead to increased trading activity and better liquidity in the market.
2. Affordability: The lower price per share makes it more affordable for smaller investors, potentially attracting a broader investor base.
3. Psychological Impact: Investors often perceive stock splits as a sign of confidence from the company, which could boost investor sentiment and stock price in the long term.
4. Attracts Retail Investors: With the stock split, retail investors who previously found the share price too high might now enter the market, contributing to a rise in demand.

Disadvantages of Stock Split:

1. No Change in Fundamentals: A stock split does not alter the intrinsic value of the company. The market capitalization remains the same, meaning shareholders’ overall wealth doesn’t increase.
2. Volatility Risk: Following a stock split, increased trading activity can lead to short-term price fluctuations and higher volatility.
3. Perception of Overvaluation: Some investors may interpret the stock split as a sign that the stock is overvalued, which could lead to selling pressure.
4. Dilution of Control: Although the value of each share remains the same, the number of shares increases, which could dilute shareholder voting power in some cases.

Conclusion

Motisons Jewellers’ stock split announcement is a strategic move that could improve liquidity and make the stock more attractive to smaller investors. While it has led to a short-term decline in stock price, the long-term outlook remains positive, especially considering the company’s multibagger status and the bullish forecast for the jewellery market. Investors should be mindful of potential short-term volatility but may view the split as a favorable opportunity for entry at a lower price point.

FAQs

1. What is a stock split? A stock split is a corporate action in which a company increases the number of its outstanding shares by dividing each share into multiple shares. In this case, Motisons Jewellers is conducting a 1:10 stock split, where each ₹10 share will be subdivided into 10 shares worth ₹1 each.
2. Why did Motisons Jewellers announce a stock split? The company likely announced the stock split to make its shares more affordable to retail investors and increase liquidity in the stock market.
3. What is the Record Date for the stock split? The Record Date is November 9, 2024. Shareholders on record as of this date will be eligible for the stock split.
4. Will the stock split affect the value of my holdings? The overall value of your holdings remains unchanged after the split, but you will own more shares at a lower price. For example, if you own 1 share at ₹10, after the split, you will own 10 shares at ₹1 each.
5. What has been the performance of Motisons Jewellers’ stock? Since its IPO in December 2023, the stock has gained over 387%, making it a multibagger. Year-to-date in 2024, the stock has rallied by 173%, with notable gains in August and September.
6. What are the risks of investing after a stock split? Stock splits can lead to short-term price volatility and, in some cases, a perceived overvaluation of the stock. Investors should consider these risks before making any decisions.

Motisons Jewellers stock split

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