Small-cap stock turns penny stock after 1:10 stock split. Share dips 6% on record date

Exxaro Tiles share price declined over 6% on Friday after the stock turned ex-date for subdivision. Exxaro Tiles shares plunged as much as 6.56% to ₹10.65 apiece on the BSE. Exxaro Tiles had previously announced a stock split in the ratio of 1:10, effectively splitting each existing share into 10 shares.

The Company has fixed Friday, December 13, 2024 as the Record Date for the purpose of determining the eligibility of shareholders for sub-division/ split of existing 1 (One) Equity Share of face value of ₹10 each fully paid up into 10 (Ten) Equity Shares of face value of Re 1 each fully paid up, Exxaro Tiles said in a regulatory filing on November 21.

Exxaro Tiles shares also turned ex-date for stock split today, with the market price of each share adjusted accordingly. Following this adjustment, Exxaro Tiles shares are now categorized as penny stocks.

A stock split involves reducing the face value of a company's shares, with the split ratio determined by the board of directors and approved by shareholders. The primary objectives of a stock split are to make shares more affordable for investors and to enhance market liquidity.

The tile manufacturer revealed plans to divide each existing share into 10 new shares in October 2024, marking its first-ever stock split. The company's board had approved stock split move on October 14.

Exxaro Tiles is producer and seller of vitrified tiles. The company manufactures both double-charge and glazed vitrified tiles, supplying to various large-scale projects. It operates two manufacturing facilities in Gujarat.

Exxaro Tiles share price trend

Exxaro Tiles is a small-cap stock with a market capitalisation of over ₹480 crore. Exxaro Tiles shares have shown decent growth in recent months, with a 25% rise over the past month and over 13% gains in the last six months.

However, on a year-to-date (YTD) basis, Exxaro Tiles stock has delivered negative returns of over 7%. 

At 10:45 AM, Exxaro Tiles shares were trading 5.26% lower at ₹10.80 apiece on the BSE.

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