Nestlé India Ltd., at Rs 22,750 per share, is the seventh highest-priced Indian stock, making it unaffordable for some investors. However, this may change soon.
The board of the maker of KitKat is scheduled to meet on Oct. 19 to consider its first-ever stock split, according to an exchange filing. If approved, it could potentially make the stock more accessible to a wider range of investors.
Stock Split Options
With a face value of Rs 10 per share, the company has three options to subdivide its shares—1:10; 1:5 and 1:2.
Out of the three options, the 1:10 split stands to be most beneficial for an investor in terms of having a lower post-split share price, while maintaining the same overall investment value. It reduces the share price to Rs 2,275 apiece, which can make the shares more liquid while preserving the total value of the investment.
The board will also consider declaring a second interim dividend for 2023, as well as reviewing the unaudited financial results for the third quarter and the first nine months ended on Sept. 30, the filing said.
Shares of Nestlé India rose as much as 4.68%, before paring gains to trade 1.54% higher at 10:20 a.m. This compares to a 0.70% decline in the benchmark NSE Nifty 50.
The total traded quantity so far in the day stood at 13 times the 30-day average volume.
Shares of Nestlé India have jumped 18.46% in the past year and 16.58% since January. In terms of stock performance, the stock is ranked 22nd in the Nifty 50 and seventh in the Nifty FMCG.
Of the 36 analysts tracking the stock, 20 maintain a 'buy' rating, 11 recommend a 'hold', and five suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 0.8%.
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