1:2 stock split: Money is not in just buying and selling stocks but in holding it for as long as one can. A long-term investor not just gains from the rise in the stock price but from the various other rewards that a listed company declares from its capital reserves. These rewards could be in the form of bonus shares, dividends, buyback of shares, stock split, etc. Prima facie, these rewards may not look big but in the long-term, these benefits go on to play an important role in the absolute return of a stock market investor.
To understand how this long-term time horizon helps you get the benefit of these rewards and its impact on one’s absolute return, we need to look at the journey of Dev Information Technology or Dev IT shares from the primary market to the secondary market. Dev IT IPO was launched on 31st March 2017 at a fixed price of ₹42 per share. One lot of the public issue comprised 3,000 company shares and it was proposed for listing on the NSE SME Emerge platform. The NSE SME stock listed flat at ₹50 apiece on NSE on 17th April 2017. Dev IT share price today is ₹102.50 apiece on NSE and it is listed on BSE as well. So, it is now a mainboard stock.
Also Read: FY24 market review: 120 stocks from Nifty 500 gave multibagger returns, 55 in the red; check list of top gainers, losers
1:2 stock split
The IT stock traded ex-split on 25th November 2022. The company board decided to go for stock split in 2022 and they declared stock subdivision from the face value of ₹10 per share to ₹5 per share. This means, the stock split was in a 1:2 ratio, which means the shareholding of a beneficiary shareholder doubled without change in the financials and free floats of the company.
1:2 stock split impact
As said above, Dev IT IPO’s one lot comprised 3,000 company shares. So, if an allottee of Dev IT IPO had remained invested in this NSE stock after flat listing, then his shareholding in the company would have surged to 6,000 after a 1:2 stock split.
₹1.26 lakh turns to ₹6.15 lakh
If a Dev IT share allottee had remained invested in this IT stock to date despite flat listing at ₹50 apiece, its ₹1.26 lakh ( ₹42 x 3000) would have turned to ₹6.15 lakh ( ₹102.50 x 6000).
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Dev IT news
The IT company recently declared about winning a fresh work order saying, “Lilikoi, a pioneering IoT/AI ecosystem provider headquartered in the USA, has initiated its inaugural work order valued at US$ 0.55 million with Dev Information Technology Limited (DEV IT). This milestone follows Lilikoi Holdings, Inc.’s recent acquisition of a controlling interest in DEV IT, marking the beginning of a transformative partnership. The scope of work involves the development of Custom Software tailored to the specific needs of one of Lilikoi’s subsidiary companies. Additionally, DEV IT will deploy a dedicated team of 40+ highly skilled professionals to oversee, streamline, and bolster the IT infrastructure across Lilikoi’s group and network entities. DEV IT’s state-of-the-art 24×7 Network Operations Centre will facilitate this comprehensive support, showcasing the commitment to seamless operations and technical excellence. Looking ahead, DEV IT anticipates a surge in international opportunities driven by the Lilikoi acquisition, setting the stage for further growth and collaboration on a global scale.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 29 Mar 2024, 02:51 PM IST