Varun Beverages Stock Split: PepsiCo’s largest franchise bottler Varun Beverages (VBL) has announced that it will consider a stock split on May 2, 2023. The current face value of the company’s stock is 10, and the company has already given 1:2 bonuses three times in the last four years.
“We wish to inform you that a meeting of the board of directors of the company will be held on Tuesday, 2 May 2023, inter-alia, to consider and approve unaudited financial results of the company, both on a standalone and consolidated basis, for the quarter ended 31 March 2023,” the company said in a BSE filing.
“Proposal for sub-division/split of existing equity shares of the company having a face value of Rs 10/- each, fully paid up, in such manner as may be determined by the board of directors subject to the approval of equity shareholders of the company and/or any other regulatory/statutory approvals (if any),” the company added.
What is Stock Split?
A stock split is a corporate action that increases the number of shares outstanding while reducing the share price. In a stock split, a large bottle of Pepsi is split into many small glasses, with the overall volume remaining the same. The goal of a stock split is to make the shares more accessible to retail investors and improve liquidity.
The company’s stock has been performing well in the market, and a stock split may further boost its appeal to investors. The company’s last bonus issue was in November 2021, when it gave a 1:2 bonus to its shareholders.
A stock split is a positive sign for a company, as it indicates that the company is confident in its future growth prospects. It also reflects the company’s desire to make its shares more accessible to investors, which can lead to increased trading volumes and liquidity.
Investors will be closely watching Varun Beverages’ upcoming stock split announcement and its impact on the company’s share price. With the company’s strong market position and growth potential, the stock split could be a positive move for both the company and its investors.
On a year-to-date basis, the stock has risen nearly 8 per cent, while it has surged 113 per cent in the last one year. It has also delivered multibagger returns to investors as the stock has risen nearly 500% in the last three years, while over 600 per cent in the last five years.
For the quarter ended December 31, 2022, Varun Beverages reported a 150 per cent year-on-year (YoY) increase in its consolidated profit after tax at Rs 81.5 crore. The company had reported a net profit of Rs 32.5 crore in the same quarter of the previous fiscal year.
The company’s revenue from operations grew by 27.7 per cent YoY to Rs 2,214 crore in the December quarter of CY22. Meanwhile, the EBITDA increased by 48.1 per cent to Rs 3,07.5 crore in Q4CY22 from Rs 207.6 crore in Q4CY21. Its sales volumes grew by 17.8% in the December quarter of the calendar year 2022 to 13.2 crore cases.
Varun Beverages is a key player in the Indian beverage industry and has been growing rapidly in recent years. The company operates in 16 countries, including India, Nepal, Sri Lanka, and Zambia. In India, Varun Beverages has 22 manufacturing plants and supplies PepsiCo products to more than 100,000 retail outlets.
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