Mrs. Bector Foods shares to trade adjusted for stock split from today; Here's what you should know

Shares of Mrs. Bector Foods Specialities Ltd. will be in focus on Friday, December 12, as the stock will begin trading adjusted for its share split announced earlier.

The company had announced during its earnings that it will be splitting one share of ₹10 into five shares of ₹2 each.

Record date for the stock split was fixed as Friday, December 12. This means, that those shareholders who had shares of Mrs. Bector Foods in their demat account as of closing on Thursday, will be eligible for the stock split.

Those who purchase shares of the company during today's trading session will not be eligible for the stock split.

For example, if an investor had 50 shares of Mrs. Bector Foods as of Thursday's close, a 1:5 split would mean that those 50 shares with a face value of ₹10 each, will turn into 250 shares of face value of ₹2 each. The stock price will adjust in proportion, while the value of the shares will remain the same.

This is the first instance of Mrs. Bector Foods announcing a stock split or any such corporate action, besides dividends, for its shareholders.

Companies generally carry out a stock split to make shares more affordable and attract a wider range of smaller investors by lowering the share price and without altering the company's market value.

Promoters of Mrs. Bector Foods had a 49% stake in the company at the end of the September quarter.

India's domestic mutual funds had a 19.9% stake in the company, while over 90,000 retail investors, or those with authorized share capital of up to ₹2 lakh, had a 10.2% stake at the end of the September quarter.

Shares of Mrs. Bector Foods ended 1.3% higher on Thursday at ₹1,312. The stock is down 20% so far this year.