3 shares that have announced stock split | stock split alert - YouTube

Hello, If you were given large Cadbury silk chocolate, would you eat the whole chocolate together or split it into smaller pieces and enjoy it?

If seen, whatever you do, it will not make any difference in the amount of chocolate.

But yes, you can divide it into small pieces and share it among many people. The concept of a stock split is also similar.

Whenever a company announces a stock split, it divides its existing shares into multiple shares in order to increase the total number of shares.

But just as the quantity of chocolate remains the same, splitting the stock doesn't make any difference to the company's market cap.

For example, a 3:1 stock split, or what may also be called a 3 for 1 stock split, would triple the existing shares of shareholders.

Suppose, Investor A has 100 shares of Company X. So after a 3:1 stock split, Investor A will have 300 shares of Company X.

Overall if Company X has a total of 1 crore shares in the market, then the total number of shares will become 3 crore shares.

But its impact is also on the share price. In this case, the share price of the company should be 1/3.

It is not exactly 1/3 because the price of the stock also depends on the demand and supply of the market, because of which the stock price may fluctuate slightly.

Therefore, it is not necessary that the price becomes exactly 1/3 after the split issue.

Usually, a stock split is done to make the company's share price more affordable.

Liquidity issues are reduced as the share price decreases and the number of shares of the company increases.

And due to the affordable price, more retail participation can be seen.

Today we will talk about 3 such companies which have recently announced stock splits.

We have considered only those companies whose market cap is more than ₹ 1500 crores.

The numbers in the video were taken from the market closing on July 14.

We will cover the list in ascending order of market cap i.e. the company which has the highest market cap, we will tell you at the end.

So let's start today's video.

The first company is Shanti Educational Initiatives Limited.

Shanti Educational Initiatives is actively engaged in the business of providing educational services and related activities.

The company is a venture of the Chiripal Group, Ahmedabad.

The company had announced a 10:1 split issue. This means that the number of shares you have will become 10 times after the split.

The ex-split date of this split is 21st July, i.e. if you buy its shares on or before 20th July, then you will be eligible for the split.

The strength of Shanti Educational Initiatives is their strong geographical and market presence.

It currently runs 6+ K-12 (Pre Primary, Primary, Secondary, and Higher Secondary) schools under Shanti Asiatic School (SAS) with over 25000 students across multiple cities in India.

Along with this, the company also runs its own preschool chain by the name of Shanti Juniors.

The company currently has 300+ pre-schools operational, located in 74+ cities.

Also, it also runs a premium category preschool chain by the name of Shanti's Hopscotch Preschool which caters to a niche segment of society.

This school is for those who aspire to premium quality education, a hygienic ambiance, and a global learning platform for their children.

A major weakness for Shanti Educational Initiatives is their declining sales and profit growth.

In the last 5 years, the company's sales have declined by 16% and profits by 17%.

Let us now take a look at the financial and technical ratios of the company.

We have included the prices of 2 technical indicators so that you can see the stocks from a technical perspective as well.

We have used 2 indicators- 200 days simple moving average i.e. 200 days SMA and RSI (14).

If a company's stock price is trading above the 200 DMA, the stock can be considered bullish.

And if the price is trading down as compared to the 200 DMA then the stock can be said to be bearish.

As for the RSI, an RSI value below 30 is generally considered oversold, and a trend reversal is likely to lead to an uptrend.

Similarly, an RSI value above 70 is considered overbought, and a trend reversal is likely.

The second company is Hindustan Foods Limited.

Hindustan Food is a contract manufacturing company.

When a manufacturing company manufactures the products or components of another company for a specified period of time, it is called a contract manufacturer.

The company is mainly involved in contract manufacturing of FMCG products including food, home care, personal care, beverages, etc.

Apart from this, the company is also involved in the manufacturing of leather footwear and accessories.

Hindustan Foods had announced a stock split of 10:2. This means that the number of shares you have will become 5 times after the split.

The ex-split date of this split is 21st July, i.e. if you buy its shares on or before 20th July, then you will be eligible for the split.

One of the key strengths of the company is its strong clientele and existing product portfolio.

The company's product portfolio is quite diverse in food and beverage, home and personal care, clothing care, and leather products.

A well-diversified portfolio protects the company from the effects of fluctuations in demand for a specific product.

The company does contract manufacturing for India's top FMCG players such as

Hindustan Unilever Ltd., Reckitt Benckiser Ltd., Godrej Consumer Products Ltd., Hector Beverages Pvt. Ltd., Danone Ltd., ITC, GSK, PepsiCo, Marico, etc.

Apart from this, Company also provides contract manufacturing services for national and international brands such as

Wipro, Bombay Shaving Company, Hush Puppies, US Polo, Louis Philippe, Zydus Wellness, etc.

Being a contract manufacturing company, Hindustan Foods also has a long-standing relationship with these clients.

Therefore, due to the long-term retention of these clients, there is no adverse impact on the future cash flows of the company.

A major risk for the company is the degradation of its quality standards.

Any compromise in quality standards or any delay in the delivery schedule is a breach of a contractual obligation for the company.

This may affect the company's long-standing reputation, but should also lead to legal repercussions for the company.

In the company's "dedicated entity model", a dedicated unit facility is assigned to specific clients, which meets the needs of those particular clients.

Because of this reason, timely contractual renewal becomes very important for the company.

As you can see on your screen, we have shown some key financial and technical ratios of the company.

The last company is Tata Steel Limited.

Tata Steel Limited is a flagship company of the Tata Group. It is the first integrated private steel company in Asia, established in 1907.

The company's presence ranges from mining and processing iron ore and coal and distributing finished products.

Tata Steel announced a stock split of 10:1. This means that the number of shares you have will become 10 times after the split.

The ex-split date of this split is 28th July, i.e. if you buy its shares on or before 27th July, then you will be eligible for the split.

The company's biggest strength is its integrated operations in India and a wide product portfolio which gives them a competitive advantage.

It's all about their strong operating cash flows. At the same time, being a brand of the Tata Group, the company has got strong brand equity.

Tata Steel's demand is highly exposed to cyclicality, volatility of raw material and metal prices, high regulatory risk, and import risk.

Coking coal is a major component of the company and if any supply-side issues arise for it, it has a direct impact on the company's capacity utilization and profitability.

Also, 50% of Tata Steel's business comes from Europe.

But their operations in Europe are fragmented, due to which they have to rely on local suppliers.

Now you can see on screen some of the key financial and technical ratios of the company.

So these were those 3 companies whose ex-split date is coming near.

We remind you that these videos are for educational purposes only, and do not recommend any kind of buy/sell.

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