PC Jeweller Hits 5% Upper Circuit Post 1:10 Stock Split
PC Jeweller Hits 5% Upper Circuit Post 1:10 Stock Split
PC Jeweller, one of India's leading jewellery designers and retailers, saw its shares rally 5% to hit the upper circuit on the NSE on Monday, December 16, following a much-anticipated 1:10 stock split. The move has not only boosted investor confidence but also increased the stock's liquidity in the market, making it more accessible to retail investors.
Key Highlights
Stock Performance Post-Split:
PC Jeweller shares opened higher on the NSE, climbing 5% to reach ₹18.29 per share. Over 76 lakh shares exchanged hands during the trading session, with a total trading value of ₹13.72 crore.What is a Stock Split?
A stock split is when a company divides its existing shares into multiple units to make them more affordable for investors. In PC Jeweller's case, one share of ₹10 face value was split into 10 shares of ₹1 face value each. The record date for the split was December 16.Fundraising Through Warrants:
Alongside the stock split, PC Jeweller's Board approved a ₹646 crore fundraise through the allotment of 11.5 crore fully convertible warrants to the promoter group. These warrants, priced at ₹56.2 each, were issued on a private placement basis, with a 25% subscription amount paid upfront.
2024: A Stellar Year for PC Jeweller
Multibagger Returns:
PC Jeweller has delivered extraordinary returns of over 245% this year, with its stock price surging from ₹50 in January to ₹174.17 before the stock split.Profit Turnaround:
After nine consecutive quarters of losses, the company achieved profitability in Q2FY25. Key metrics include:- Domestic Sales: ₹505 crore (Q2FY25) vs ₹33 crore (Q2FY24)
- EBITDA: ₹129 crore in Q2FY25 vs a loss of ₹23 crore in Q2FY24
- Net Profit: ₹179 crore in Q2FY25 compared to a loss of ₹152 crore in the same quarter last year
Government Support:
A reduction in custom duty on gold imports, from 15% to 6%, announced in the Union Budget, provided a major boost to the jewellery sector, driving the company's strong performance.
Insolvency Pleas Resolved
PC Jeweller also achieved a significant milestone by settling its long-standing insolvency issues with a consortium of 14 banks. The company’s Offer for Settlement (OTS) was approved, enabling it to clear a part of its dues. A portion of the funds required for this settlement was raised through the promoter group's subscription to convertible warrants.
Conclusion
PC Jeweller's stock split, robust Q2FY25 performance, and resolution of insolvency issues mark a major turnaround for the company. As it positions itself for future growth, these developments are likely to further boost investor sentiment and pave the way for continued success in the competitive jewellery retail market.
Reference from: https://upstox.com/news/market-news/stocks/pc-jeweller-shares-spurt-5-to-hit-upper-circuit-post-share-split/article-135345/