Thatta Cement Considers Stock Split to Enhance Investor Access

Thatta Cement Company Limited (THCCL) has officially communicated to the exchange that its Board of Directors (BoD) has suggested a sub-division of its equity shares, pending approval from shareholders.

“The board has put forward a recommendation to sub-divide the company’s existing ordinary shares by decreasing the face value from Rs10 to Rs2 per share. This effectively means a stock split at a ratio of 5 shares for each existing share,” according to the notification issued to the stock exchange on Friday.

A share sub-division, also known as a stock split, represents a corporate action that elevates the number of outstanding shares while concurrently lowering the price per share. The aggregate value of the company, along with each investor’s stake, remains the same.

THCCL stated in its notice to the exchange that the main intention behind the stock split is to improve the accessibility and affordability of the company’s stock for individual and small-scale investors, thereby expanding its overall investor base.

“The action is also anticipated to boost market liquidity through higher trading volumes.

“Moreover, this decision underscores the company’s optimism regarding its long-term growth potential, which is further supported by a significant appreciation in its stock value over the recent year.

“In summary, the initiative is geared toward encouraging greater investor involvement and solidifying Thatta Cement’s footprint in the equity market,” the company elaborated.

The cement manufacturer clarified that upon approval at the Extraordinary General Meeting (EOGM), the company’s current subscribed and fully paid capital, which consists of 99,718,125 ordinary shares valued at Rs10 each, will be divided into 498,590,625 ordinary shares valued at Rs2 each.

“Consequently, eligible shareholders will be entitled to receive 5 ordinary shares for every single share they possess, based on the determined record date,” the company concluded.