1:5 Stock Split: Buy, Sell, or Hold? Ex-Date is this week on March 22

Within the commodities industry, Refex Industries Limited is a small-cap business. At the close of business on Friday, its market value was Rs 1,418.38 Cr. Refex Industries Limited (RIL) is an Indian company that produces and refills refrigerant gases. Refex Industries Ltd. also joined the market, offering fly ash processing and disposal, round-the-clock management of coal yards, crushing of uncrushed coal, and coal marketing to power plants. The corporation has designated 22/03/2024 as the record date for the stock split announcement under discussion.

Split Stock of Refex Industries

“This is to inform you that the Company has set Friday, March 22, 2024, as the Record Date for determining entitlement of Equity Shareholders for the purpose of subdividing/splitting existing Equity Shares of the Company, in accordance with Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.” This means that 1 (one) equity share, fully paid up and with a face value of Rs. 10/- (Rupees ten only), will be subdivided into 5 (five) equity shares, fully paid up and ranking pari-passu in all respects. The Equity Shareholders approved this subdivide/split on March 1, 2024, through postal ballot. On March 2, 2024, the Stock Exchanges were informed of the postal ballot vote results,” Refex Industries said in a regulatory filing on March 07, 2024.

News from Refex Industries
“Fund Raising through Preferential issue to Promoter / Promoter Group – Preferential Issue of 50,00,000 (Fifty lakhs) equity shares and 1,25,75,000 (One Crore Twenty-Five lakhs and Seventy-Five Thousand) warrants at face value of Rs. 2/- each (i.e., post-split/sub-division) to the Promoter/ Promoter Group entity(s), subject to approval from the shareholders in the upcoming General Meeting and sanctions/approvals from the other regulatory/governmental authorities, as may be required,” the company said in a BSE filing on March 02, 2024.

According to the Valuation Report, the Fair Value of one equity share, each having a face value of Rs 10/-, belongs to the Issuer and is Rs 620.03/- (Rupees Six Hundred and Twenty and Three Paise Only). For one equity share, the Issuer’s Fair Value is Rs 124/- (Rupees One Hundred and Twenty-Four Only), as it is the post-split/sub-division value that is proportionately adjusted. As a result, in compliance with Regulations 164 and 166A of Chapter V of the SEBI ICDR Regulations, the Issue Price has been set at Rs 125/- (Rupees One Hundred and Twenty-Five only), which is not less than the floor price determined,” the firm said.

“Floor Price has been arrived at Rs 124/- and the Issue Price has been fixed at Rs 125/-, i.e., the adjusted values, taking into consideration the sub-division of nominal value of the equity shares of the Company, from one equity share of Rs 10/- to one equity share of Rs 2/- (thereby splitting one equity share of Rs 10/- into 5 equity shares of Rs 2/- each) (before stock-split Floor Price arrived at Rs 620.03/- and accordingly, Issue Price becomes Rs 625/-),” stated Refex Industries in a filing with the BSE.

Financials of Refex Industries
The company’s net sales for the December 2023 quarter were Rs 301.51 crore, down 20.74% from the Rs 380.40 crore of the December 2022 quarter. The company’s net profit in Q3FY24 was Rs. 19.78 crore, down 24.38% from Q3FY23’s Rs. 26.15 crore. From Rs. 40.97 crore in the same quarter of the previous fiscal year to Rs. 36.88 crore in the reporting quarter, EBITDA decreased by 9.98%.

Target Share Price for Refex Industries
On the daily charts, Refex Industries is bearish, with significant resistance near 685. In the short term, 550 might be the objective if the daily close drops below the 600 support level, according to AR Ramachandran of Tips2trades.