Fineotex Chemical share price crashed 90% today; here's why

Fineotex Chemical Ltd shares plunged nearly 90 per cent intraday on Friday as the stock adjusted for its bonus issue and stock split. The scrip, which had closed at Rs 248.60 apiece on the NSE in the previous session, opened at Rs 25.25 apiece—down 89.7 per cent—triggering confusion among investors.

The sharp decline was purely a result of corporate action adjustments. The company’s shares were split from a face value of Rs 2 each into smaller units with the same face value, and Friday was also the ex-date for its 4:1 bonus issue. Some brokerage trading apps may still be displaying the unadjusted price, making the fall appear more severe than it actually is.

In fact, adjusted for corporate actions, the stock was up 8.45 per cent at Rs 26.95 a piece. 

In effect, for every one share held, investors will now receive four additional shares, increasing their total holding to five shares. Following the split and bonus adjustments, one share will translate into ten shares, significantly improving the stock’s liquidity and accessibility.

The corporate actions are intended to enhance market participation by making Fineotex Chemical’s shares more affordable and liquid, encouraging wider retail ownership.
While bonus issues and stock splits are often perceived as similar, their purposes differ. A bonus issue distributes additional shares from a company’s accumulated earnings without altering face value, rewarding existing shareholders. A stock split, meanwhile, divides existing shares into smaller units, reducing face value to improve liquidity.
As of March 31, 2025, Fineotex Chemical’s audited financials showed free reserves of Rs 415.72 crore and a securities premium account of Rs 189.48 crore. The bonus shares are expected to be credited within two months of board approval, subject to statutory clearances.

In the case of the stock split, Fineotex Chemical aims to complete the corporate action on or before November 25, 2025, subject to requisite approvals.

The impact of a bonus issue is relatively direct—it increases the number of outstanding shares, reduces the company’s free reserves, and lowers earnings per share (EPS). Consequently, the stock price adjusts downward.