PC Jeweller Ltd, one of India's leading jewellery retailers, has made headlines again as its stock hit the upper circuit. It follows key announcements regarding a 1:10 stock split and a ₹646 crore raised through funds from its promoters. The stock surged by 5% on October 1, 2024, reaching ₹187.07 during opening trade, continuing its upward trend from the previous two sessions.
Investors have shown significant interest, and many are actively looking to buy shares online, given the company's recent developments.
Stock performance and upper circuit
PC Jeweller's stock has been on a strong upward trajectory, hitting the upper circuit for three consecutive sessions. As of October 1, the share price increased by another 5%, reaching ₹187.07, marking continued interest from investors.
Hitting the upper circuit means that the stock has reached the maximum price limit set by the exchange for the trading day, preventing further price increases. This is often seen when there is heightened demand for a stock, as is currently the case with PC Jeweller. Investors looking to buy shares online have been particularly active, seizing the opportunity presented by the company's ongoing developments.
Share capital structure and liquidity enhancement
The stock split will significantly alter the company's capital structure. Currently, PC Jeweller has authorised share capital of 100 crore equity shares with a face value of ₹10 each. After the stock split, this will change to 1,000 crore equity shares with a face value of ₹1 each. As for the issued, subscribed, and paid-up share capital, it will increase from 46.54 crore equity shares at ₹10 each to 465.40 crore equity shares at ₹1 each. This increase in share capital will improve the liquidity of PC Jeweller's stock, making it more accessible to retail investors.
The company's decision to pursue a stock split is strategically aimed at enhancing shareholder value and increasing retail participation. As a result, many individual investors are looking to buy shares online as they see this as a great opportunity to invest in a company with a promising outlook.
Convertible warrants and promoter commitment
The ₹646 crore funds raised through the issuance of 11.5 crore convertible warrants is another significant move by PC Jeweller. These warrants, priced at ₹56.20 each, will generate much-needed capital to support the company's growth initiatives. The initial subscription of ₹161.6 crore, representing 25% of the total issue price, will be raised upfront, while the remaining 75% must be paid within 18 months.
The warrants will be allotted to two promoter group entities, showing a strong commitment from the promoters toward the company's future. This move not only strengthens PC Jeweller's balance sheet but also aligns the interests of the promoters with the long-term goals of the company. The company is well-positioned to drive its growth strategy forward, encouraging more investors to buy shares online as they recognise the potential for long-term value creation.
Key takeaways
PC Jeweller's stock has been on a remarkable run, hitting the upper circuit once again following its announcements of a stock split. The 1:10 stock split will make the shares more affordable and accessible, while the capital raised through the convertible warrants will provide the company with the resources to fuel its growth.
These developments have led to heightened interest from investors, many of whom are choosing to buy shares online to capitalise on PC Jeweller's strong market position and growth potential. With a promising outlook, PC Jeweller is poised to continue delivering value to its shareholders in the coming months.
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