Maggi Maker Nestle's Shares Jump To All-Time High After Announcing First Ever Stock Split

In a historic decision, Maggi maker Nestle has announced its first ever stock split in India. The announcement, coupled with strong financial results for the September quarter (Q3), has shot up one of India's highest-priced stocks, Nestle India¡¯s shares,to a record high mark today.

The FMCG giant houses many big brands, including KitKat, Nescafe coffee, and Maggi, among many others.

What Has Nestle Announced?

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To encourage more retail participation in its stock, Nestle India announced on Thursday that its board has approved a stock split in the ratio of 1:10. This means that one share with a face value of Rs 10 would be split into 10 shares with a face value of Rs 1 each, as per the ET report.

For the uninitiated, a stock split happens when a company increases the number of its shares to boost the stock's liquidity. The company usually carries out the stock split by issuing additional shares to shareholders.

Although the number of shares outstanding increases by a specific multiple, the total value of all shares outstanding remains the same because a split does not fundamentally change the company's value. Companies often choose to split their stock to lower their trading price to a more comfortable range for most investors and to increase the liquidity of trading in their shares.

Also Read: Nestle To Invest Rs 5,000 Crore In India By 2025

How Are Nestle Shares Performing?

Maggi maker Nestle India share price hit a fresh record high today morning (Friday, October 20th) after the company reported strong earnings for the quarter ended September 2023 and the decision of the first ever stock split in India.

Nestle India shares hit their all-time high of Rs 24,735.50 on the BSE and Rs 24,745 on the NSE this morning.

Its shares are up nearly 25% this year till date, and its current market cap is Rs 2.35 trillion.

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Also Read: All You Need To Know About Tata Group's Most Expensive Stock

Why Is The Stock Split Being Done?

Nestle said that this stock split is being done to enhance the liquidity of the company's equity shares and to encourage the participation of retail investors by making equity shares of the company more affordable. The split will come into effect within two months from the date of shareholder approval. Nestle India stock comes with one of the highest price tags on Dalal Street.

Besides MRF, which is the first stock to cross Rs 1 lakh, these are among the highest priced stocks in India.

When Will Nestle Pay Dividends?

Nestle has also declared an interim dividend of Rs 140 per share for the year 2023. The payout will be made on and from November 16, 2023, to shareholders as of the record date of November 1, as per the MoneyControl report.

Both the stock split and dividend decisions were announced after a board meeting of the company to declare the September quarter results, in which profit rose 37.3% year-on-year (YoY) to Rs 908 crore while revenue was up 9.5% YoY to Rs 5,036.8 crore.

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