2:1 bonus shares, 1:10 stock split: Multibagger SME IPO turns ₹1.2 lakh to ₹23.5 lakh in nine years
Multibagger IPO: A long term investor enjoys various other benefits that a short term investor or trader can't even think of. As per the listing rule, a listed entoty can reward its shareholders from its capital resevers that is an additional benefit for shareholders. so, a short term investor earns from stock movement whereas a long term shareholders earns from stock movement and various rewards announced by the listed company like bonus shares, interim/final/special dividends, stock split, buyback of shares etc.
A company may announced most of these rewards in long term, which may look small at once but in long term, its impact leads to whopping return for a shareholder. For those who can't believe in such small rewards given by listed companies from its capital reserves, they need to look at Captain Pipes IPO. This SME IPO was proposed for listing on BSE SME exchange and it was launched at ₹40 apiece in November 2014.
Captain Pipes IPO lot size was 3,000 company shares. The SME stock listed on BSE SME exchange at ₹41.90 levels, delivering tepid 4.75 per cent listing gain to the allottees. However, the SME stock declared stock split and bonus shares in 2023.
The SME stock declared stock split in 2023 and it traded ex-split on 3rd March 2023 for subdivision of stocks in 1:10, which means one share of the company with face value of ₹10 was subdivided into 10 shares with a face value of Re 1 per equity share. So, after stock split in 1:10 ratio, an investors shareholding in the stock surged 10 times and after the stock subdivision, Re 1 rise in the stock led to ₹10 per share rise for a shareholder who was a beneficiary of this 1:10 stock split. On 3rd March 2023, this SME stock traded ex-bonus as well for issuance of 2:1
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