Nestle India shares fall 2% on ex-date for stock split. Details here

Nestle India witnessed a decline in its share price during early trading on Friday as the stock started trading ex-split. Opening on a downside note, it reached an intraday low of Rs 2,657 per share on the Bombay Stock Exchange (BSE), reflecting nearly a 2 per cent dip from its Thursday closing of Rs 2,711.60 per equity share.

Investors and market observers are expected to closely monitor Nestle India's stock, considering its increased affordability post the stock subdivision. The board of directors of Nestle India Limited has set January 5, 2024, as the record date for the stock split, adopting a 1:10 ratio. With this, one Nestle India share with a face value of Rs 10 will be subdivided into ten shares with a face value of Re. 1 each.

Nestle India had communicated about the stock split record date to the stock market bourses, stating, "Pursuant to Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that the Company has fixed Friday, 5th January 2024 as the “Record Date" for determining entitlement of Equity Shareholders for the purpose of sub-division/ split of existing Equity Shares of the Company..."

This strategic move by Nestle India's board aims to enhance the stock's affordability and may lead to increased trading volume, with the share price likely to adjust to around Rs 2,700 apiece post the stock split at a 1:10 ratio. It may be noted that the share price of Nestle India concluded at Rs 27,150 per share on the NSE as of Thursday.

In the Q2FY24 results, Nestle India reported a 36 per cent YoY surge in profits, reaching Rs 908 crore, accompanied by a 9.6 per cent growth in revenues, totaling Rs 5,036 crore.

During the September 2023 quarter, Foreign Institutional Investors (FIIs) reduced their stake from 12.38 per cent in the preceding June quarter to 12.1 per cent. In contrast, Domestic Institutional Investors (DIIs) increased their ownership from 9.05 per cent to 9.32 per cent during the same period.