The company has decided to sub-divide its shares in the 5:1 ratio and fixed August 26, 2022, as the record date to determine eligibility for the same.
Shares of Rama Steel Tubes were locked in the upper circuit as they zoomed 5 per cent to Rs 115 on Thursday. The scrip had settled at Rs 109.55 on an adjusted basis.
The company has finalized to split the face value of shares to Re 1 from Rs 5 each.
Since the record date for the ex-stock split is August 26, the shares trade with a new face value a day earlier. Investors who will get the delivery of shares in their demat account as of Thursday will be eligible for the split.
In June 2022, the board of directors of the company recommended the sub-division of equity shares, which was subsequently approved by the shareholders.
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. It decreases the market price of the individual shares but does not result in changing the market cap of the company.
Rama Steel Tubes is a smallcap company, with a market cap of Rs 965 crore that operates in the ferrous metals industry. The company is one of India’s top producers of rigid PVC, GI and steel pipes and tubes.