A stock split divides existing shares into smaller units with a reduced face value to enhance liquidity. In this case, the 1:2 split means every share is split into two, with face value reduced from Rs 10 to Rs 5. While dividend per share will adjust proportionately, the company’s share capital and reserves remain unchanged. Price feeds on some trading platforms may not yet reflect the split-adjusted value, making the stock appear to “plunge” post the corporate action.
BEML operates across three core segments: Defence & Aerospace, Mining & Construction, and Rail & Metro. The stock delivered an 18-year technical breakout in 2023 and has continued to rally sharply. Over the past two years, it is up 336 per cent; over three years, 458 per cent; and over five years, 1,615 per cent. In just the last three months, BEML shares have gained 122 per cent.
The company’s authorised share capital stands at Rs 100,00,00,000, earlier divided into 10,00,00,000 equity shares of face value Rs 10 each. Its issued, subscribed and paid-up share capital is Rs 41,64,45,000, represented by 4,16,44,500 equity shares of Rs 10 each.
Following the sub-division, the authorised share capital remains unchanged at Rs 100,00,00,000, but is now split into 20,00,00,000 equity shares of face value Rs 5 each. The issued, subscribed and paid-up capital also remains Rs 41,64,45,000, with the number of equity shares doubling to 8,32,89,000, each carrying a reduced face value of Rs 5.
A stock split is distinct from a bonus issue. In a split, the face value is reduced and the number of shares increases, but the total value of an investor’s holding remains the same. A bonus issue, on the other hand, allocates additional shares to shareholders from accumulated profits without changing face value. Dividend entitlements remain unchanged in a bonus issue, as overall capital structure is unaffected.
