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Government-owned defence and heavy equipment PSU BEML Ltd. on Monday, July 21, said it would have a stock split of 1:2, reducing the face value of every equity share to Rs 5 from Rs 10. The proposal, decided by the company's board of directors, will be for approval by shareholders and as part of a strategy to enhance retail participation and enhance liquidity in stocks.
This is for the first time that BEML is going for a stock split, and interestingly, the company has never distributed bonus shares to the shareholders since its listing.
Record date to be announced later
The firm, in its exchange filing, stated that the record date for the stock split will be determined and notified later subject to shareholder approval. After the split, the number of outstanding shares will double whereas the share price is likely to adjust proportionally, making it relatively cheaper for small investors.
Why companies split shares
Stock splits are typically done to make the market more accessible by lowering the price per share without changing the company's market capitalization. This action adds liquidity and makes the stock more attractive to individual investors. While the overall value of investment does not change, the size of the investors' holdings is doubled in the event of a 1:2 split.
BEML share price movement
After the announcement, BEML Ltd. shares fell 0.40 per cent to Rs 4,383.80 on the BSE on Monday. The counter has risen 7 per cent till now in 2025, and the stock has been among the most active on investors' watchlists because of its increasing footprint in the defence and railways businesses.
What this implies for investors
After the record date is settled and the split is effective, one holding of Rs 10 face value will get two holdings of Rs 5 face value each, with no variation in the total value in their hands. The action may prove to be helping retail participation, particularly as PSU shares continue to draw investor attention even as government capex push remains in focus.
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