Edible oils maker Ajanta Soya board approves 5:1 stock split

Multibagger stock edible oils manufacturer Ajanta Soya Ltd on Wednesday said its board has approved a stock split in the ratio of 5:1, which means, for every one share an investor holds, he or she will have five shares after the split takes place.

The record date for the purpose of split will be intimated in due course. The expected time of completion is approximately 2 months from the date of approval by the Board.

The company said the decision to split the stock will "enhance the liquidity of equity shares and encourage the participation of small investors by making it more affordable."

What is a stock split?

A stock split happens when a company increases the number of its shares to boost the stock's liquidity. Although the number of shares outstanding increases by a specific multiple, the total dollar value of all shares outstanding remains the same, because a split does not fundamentally change the company's value.

The most common split ratios are 2-for-1 or 3-for-1 (sometimes denoted as 2:1 or 3:1), which means that the stockholder will have two or three shares, respectively, after the split takes place for every share held beforehand.

Incorporated in 1992, Ajanta Soya is engaged in the primary business of manufacturing edible oils (Vanaspati) and various kinds of cooking oil with applications products for bakery like biscuits, puffs, pastries and others.

The company has given multibagger returns to investors over the last one year period, rising over 200 per cent shares of Ajanta Soya on Wednesday closed almost flat at Rs 246.70 apiece on BSE.