Shriram Finance Ltd, a prominent non-banking financial company (NBFC) in India, has announced a stock split in the ratio of 5:1, reducing the face value of its equity shares from ₹10 to ₹2 each. The company has fixed January 10, 2025, as the record date to determine shareholder entitlement for the stock split.
Details of the Stock Split
- Old Face Value: ₹10 per share.
- New Face Value: ₹2 per share after the split.
- Stock Split Ratio: 5:1 (each existing share will split into five).
- Record Date: January 10, 2025.
This corporate action, approved by shareholders through a postal ballot on December 20, 2024, is aimed at enhancing the stock’s liquidity and making it more affordable for a larger pool of investors.
Rationale Behind the Stock Split
The stock split is being undertaken to:
- Boost Liquidity: By increasing the number of outstanding shares, the company aims to enhance tradability and attract retail investors.
- Enhance Accessibility: Lower per-share prices make the stock more affordable to a wider range of investors.
- Align with Growth Objectives: Reflecting strong financial performance, this move supports the company’s mission to expand its investor base.
Performance and Financial Highlights
Shriram Finance has displayed robust financial performance in recent quarters:
- Q2 FY25 Results:
- Revenue: ₹10,096.7 crore.
- Net Profit: ₹2,027.3 crore.
- H1 FY25 Results:
- Revenue: ₹19,693.8 crore.
- Net Profit: ₹4,051.9 crore.
- Market Cap: Over ₹1.17 lakh crore.
Its price-to-earnings (PE) ratio stands at 17x, below the industry average of 25x, reflecting potential undervaluation.
About Shriram Finance
As a flagship entity of the Shriram Group, Shriram Finance is among the largest NBFCs in India with:
- Assets Under Management (AUM): Over ₹2.43 trillion.
- Customer Base: Servicing 90.26 lakh customers across India.
- Network: 3,149 branches and 77,764 employees.
The company offers diverse financial solutions, including commercial vehicle loans, MSME loans, personal loans, and green financing through its newly launched Shriram Green Finance vertical.
The stock split reflects Shriram Finance’s confidence in its growth trajectory and commitment to enhancing shareholder value. With its strong financial fundamentals and strategic focus on expanding its offerings, the company remains a key player in India’s NBFC sector.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice.
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