Varun Beverages soars 5% as shares trade ex-stock split

The company had approved a 2:5 stock split for its shares.

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Shares of Varun Beverages soared 5 percent in early trade on September 12 as they traded ex-stock split. The company had approved a 2:5 stock split for its shares.

After the stock split, the price dropped to Rs 635.50 from its previous close of Rs 1,569.15, as the float in the counter increased. Companies often carry out stock splits to lower the price per share, making it more affordable for smaller investors. However, this doesn’t alter the company’s overall value or an investor's stake as the shares owned are split according to the share split ratio. By boosting the number of shares at a lower price, stock splits are aimed at enhancing trading volume and liquidity.

At 09.46 am, shares of Varun Beverages were trading Rs 657.90 on the NSE.

The board of directors had set September 12 as the 'record date', marking the deadline for identifying shareholders eligible for the company's latest stock split. In this split, each existing share with a face value of Rs 5 was divided into shares with a face value of Rs 2.

This follows a previous stock split in June 2023, when the company reduced the face value from Rs 10 to Rs 5. With the new split, the face value of each share has been further reduced.

Shares of the company also surged over 3 percent in the previous session as investors lapped up the stock ahead of its record date to become eligible for the stock split.

As for the company's financials, it reported a 26 percent on-year growth in net profit to Rs 1,262 crore in the June quarter, driven by volume expansion and better margins. Revenue also rose over 28 percent to Rs 7,333 crore while margins expanded 74 basis points to 27.7 percent.

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