BEML Announces First-Ever 1:2 Stock Split; What It Means for Shareholders of this Defence PSU?

State-owned heavy equipment manufacturer BEML Ltd announced on Monday that its Board of Directors has approved a proposal for the company's first-ever stock split. Under the proposal, each existing equity share with a face value of Rs 10 will be divided into two fully paid equity shares of Rs 5 each, representing a 1:2 stock split.

BEML 1:2 Stock Split Announced

"sub-division/ split of existing 1 (One) Equity Share of face value of Rs.10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of face value of Rs. 5/- (Rupees Five Only) each fully paid up, subject to shareholders' approval (Details enclosed at Annexure-I), " the company announced.

Notably, this marks a first for BEML-not only is it debuting with a stock split, but it has also never issued bonus shares, reinforcing the significance of this move in its corporate history. Management's stated objective is to enhance stock liquidity and attract a wider base of retail and institutional investors.

BEML Stock Split Recording Date

The board further stated, "The record date for the purpose of above sub-division/ split of Equity Shares shall be decided after obtaining approval for sub-division/ split from the shareholders and will be intimated in due course."

The plan, however, remains subject to shareholder approval. Once approved, the Board will notify the record date, which the company intends to determine and announce in a timely manner.

BEML Equity Restructuring

The underlying equity structure of BEML will remain unchanged in terms of capital amount, even though the share composition will become more granular.

Authorised share capital will continue to stand at Rs 100 crore, but the number of shares will double-rising from 10 crore equity shares of Rs 10 each to 20 crore shares of Rs 5 each.

The issued, subscribed, and paid-up capital remains fixed at Rs 41.64 crore, but the share count will adjust from approximately 4.16 crore to 8.32 crore outstanding shares, each with a Rs 5 face value.

After winning shareholder approval, the company expects to implement the split within the next two to three months and simultaneously declare the official record date for the stock split.

Stock Market Reaction: BEML Share Price Amid Split Announcement

On the day of the board's approval, shares of BEML closed the trading session at Rs 4,372.00 post-announcement, reflecting a decline of Rs 29.50 or 0.67% from its previous closing price.

The stock began the session at Rs 4,412.70 and moved within a narrow range, hitting a high of Rs 4,441.80 and a low of Rs 4,352.00 during intraday trade.

Despite the slight dip on the day, BEML has shown strong performance over the past year. The stock has reached a 52-week high of Rs 4,874.80, while its 52-week low stands at Rs 2,350.00.

What's Next: BEML Shareholder Approval and Execution Timeline

Upcoming Step: The proposal now heads for approval at the next general meeting or an Extraordinary General Meeting (EGM).

• Execution Window: BEML plans to complete the stock split within two to three months following shareholder approval.

• Record Date: Once the sharecount and corporate approvals are finalized, the Board will formally set and declare the record date for the split.

Once shareholder approval is secured, BEML will formally announce the record date for the stock split. The company expects to complete all regulatory and procedural requirements promptly to ensure the split is executed smoothly.