BEML Share Price Declines As Stock Trades Ex-Split

The shares of BEML Ltd. have fallen 50% on Monday as the stock begins trading adjusted for its stock split announced earlier. The PSU had earlier announced a 1:2 stock split, which means that one share with a face value of Rs 10, will be split into two shares of Rs 5 each.

BEML said the stock split is being undertaken to comply with government guidelines on capital restructuring, encourage wider participation of small investors, and enhance liquidity in the market.

A stock split is a corporate action where a company increases the number of outstanding shares by reducing the face value per share. This typically enhances liquidity as the stock price adjusts accordingly. While the number of shares increases, the total investment value remains unchanged.

The stock split will not affect the company's market capitalisation but will increase the number of shares twofold. This move is generally aimed at enhancing market liquidity.

To be eligible for a stock split, investors must hold shares as of the record date announced by the company. The record date determines who will receive additional shares post-split, based on the split ratio. With India following the T+1 settlement cycle, investors need to purchase the stock at least one trading day before the record date to be eligible.

Buying shares on the record date itself won't qualify, as the ownership won't be reflected in time during trade.

BEML Share Price Today

The scrip fell as much as 1.63% to Rs 2,164 apiece on Monday. It pared losses to trade 0.29% lower at Rs 2,193.60 apiece, as of 9:46 a.m. This compares to a 0.02% advance in the NSE Nifty 50 Index.

It has risen 10.03% in the last 12 months and risen 6.39% year-to-date. Total traded volume so far in the day stood at 0.34 times its 30-day average. The relative strength index was at 52.

Out of four analysts tracking the company, three maintain a 'buy' rating and one recommends a 'hold,' according to Bloomberg data. The average 12-month consensus price target of Rs 4,761 implies an upside of 7.7%.