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Shares of Jindal SAW Ltd will turn ex-date for stock split today

Stocks
2 min Read Oct 9, 2024
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Shares of Jindal SAW Ltd are set to undergo a stock split today. The company’s shares, currently with a face value of ₹2, will split into shares with a face value of Re 1. Today also marks the record date for determining which shareholders will be eligible for this split. Over the past year, this multibagger stock has surged by 123%, and an impressive 804% over the past five years.

Stock split boosts liquidity

A stock split is often a strategic move to enhance the liquidity of a company’s equity shares. It makes shares more affordable, thereby encouraging retail investors to invest in stocks. This enhanced accessibility may result in increased trading volumes and potentially boost the stock’s market presence.

Diverse business operations

Jindal SAW operates across four key business segments: SAW pipes, DI pipes & fittings, seamless pipes & tubes, and mining & pellets. The company boasts a geographically diversified manufacturing footprint, with operations spread across several states, including Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh, and Karnataka. Notably, it has expanded its presence in Bhilwara, Rajasthan, where it has established a low-grade iron ore mine and implemented an iron ore beneficiation and pellet plant.

Strong order book

Jindal SAW’s order book for iron and steel pipes and pellets stands at an impressive $1.65 billion. This includes orders worth $1,632 million for iron and steel pipes and an additional $15 million for pellets. Approximately 32% of the company’s orders originate from global markets, indicating a strong international presence.

According to SBI Securities, “The order book provides visibility for approximately three to four quarters.” This suggests a steady flow of business for the company in the near future.

Debt management and future outlook

The brokerage also reported that Jindal SAW’s standalone debt rose from ₹3,200 crore to ₹3,900 crore. This increase is attributed to a higher working capital requirement, driven by ramped-up operations and efforts to secure raw materials at stabilised prices. However, the company anticipates paying off its long-term debt by FY26, indicating a proactive approach to financial management.

Key takeaways

  • Jindal SAW Ltd is splitting its shares from ₹2 to Re 1 today.

  • The stock has gained 123% in the past year and 804% in five years.

  • The company operates in four key business areas with a diverse manufacturing footprint.

  • Its order book is robust, valued at $1.65 billion, with significant global exposure.

  • Jindal SAW plans to reduce long-term debt by FY26.

Investors looking to invest in stocks can consider Jindal SAW a potential opportunity, given its strong growth and diversified operations.