Mrs Bectors stock split explained: Share price set to see sharp fall; here's why

Mrs Bectors Food Specialities, along with Bharat Rasayan Ltd, is set to see a sharp decline in its quoted share price on Friday, December 12, as the stock turned ex-date for its maiden split. Today is also the record date for the corporate action as the company’s shares get split from a face value Rs 10 into five shares of face value Rs 2 each. The biscuit maker followed several other companies – including Computer Age Management Services, Fineotex Chemicals, BEML, Adani Power, Zydus Wellness, Rolex Rings, Tata Investment Corporation and Paras Defence – that underwent splits in recent months.

Mrs Bectors Food Specialities operates in the premium and mid-premium biscuit segments and the premium bakery category in North India. It manufactures and markets cookies, creams, crackers, digestives and glucose biscuits under its flagship brand Mrs Bector’s Cremica, and sells bakery products such as breads, buns, pizza bases and cakes under its English Oven brand.

Existing shareholders holding one share will receive four additional shares, taking their total holding to five. The split will trigger a mechanical price adjustment on the counter, as the conversion effectively reduced the per-share price while expanding the share count. The action is aimed at improving liquidity and affordability and making Mrs Bectors Food Specialities’ equity shares more accessible to retail investors.

The stock had already been under pressure, declining 20 per cent year-to-date and 28 per cent over the past year. It closed at Rs 1,312 on Thursday.

The recent reduction in GST on biscuits from 18 per cent to 5 per cent was expected to support industry growth and further shift consumer preference towards branded offerings. Mrs Bectors Food Specialities did not face material challenges in order inflows, with key customers continuing to accept orders and ongoing projects progressing as planned. Export demand, however, saw a temporary slowdown as buyers awaited rationalisation of the 50 per cent US tariffs. Management expected the impact to be transitory.

Monarch Networth Capital, in a November note, viewed the company as well-positioned for sustained growth, citing its innovation pipeline, near-completion of capacity expansion, and increasing distribution via quick-commerce channels and Cremica Preferred Outlets. The brokerage said capex completion, distribution gains and improving ROE/ROCE could act as key catalysts and that valuations offered compelling long-term value.