Image Source: IPO
In a strategic move aimed at enhancing liquidity and broadening investor participation, A B Infrabuild Ltd has announced its intention to consider an equity share split. This development comes on the heels of a successful rights issue and a robust financial performance in FY24, signaling the company’s commitment to shareholder value creation and capital market engagement.
The proposed share split, if approved, would mark a pivotal moment in A B Infrabuild’s corporate journey, especially as it continues to scale its infrastructure footprint across India. The company, known for its specialization in railway infrastructure, road over bridges, and civil engineering contracts, is positioning itself for deeper market penetration and stronger retail investor appeal.
Key Highlights from the Announcement
A B Infrabuild Ltd is set to deliberate on an equity share split, subject to board and shareholder approval
The move follows a successful rights issue in April 2025, which was oversubscribed by 1.39 times
The company reported a 51 percent year-on-year increase in revenue and a 51 percent jump in profit after tax for FY24
The share split is expected to improve liquidity, reduce the per-share price, and attract a wider investor base
Understanding the Equity Share Split Proposal
Strategic Rationale
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A share split typically involves dividing each existing equity share into multiple shares, thereby reducing the face value and market price per share
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This makes the stock more affordable for retail investors and can lead to increased trading volumes and broader ownership
Market Timing
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The timing aligns with A B Infrabuild’s recent capital market activity, including its April 2025 rights issue priced at ₹37.50 per share
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The company’s shares are currently trading around ₹146, and a split could bring the price into a more accessible range for small investors
Shareholder Impact
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Existing shareholders will retain the same overall value of their holdings, but the number of shares they own will increase proportionally
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For example, a 1:2 split would convert one ₹10 face value share into two ₹5 face value shares
Recent Financial and Operational Momentum
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Revenue for FY24 surged to ₹184.49 crore, up from ₹123.79 crore in FY23
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Profit after tax rose to ₹11.42 crore, compared to ₹7.54 crore in the previous year
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Net worth nearly doubled to ₹81.55 crore, reflecting strong retained earnings and capital infusion
The company’s total assets grew to ₹156.62 crore, while borrowings remained moderate at ₹41.1 crore
Rights Issue Success and Capital Utilization
Oversubscription and Investor Confidence
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The April 2025 rights issue was oversubscribed by 1.39 times, with bids totaling over 1.47 crore shares across BSE and NSE
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This reflects strong investor confidence in the company’s growth trajectory and operational execution
Use of Proceeds
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Funds raised are being deployed toward working capital, general corporate purposes, and issue-related expenses
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The capital will also support ongoing infrastructure projects and expansion into new geographies
Broader Strategic Context
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A B Infrabuild is a key contractor for PWD Maharashtra, MCGM, and various railway authorities
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Its portfolio includes road contracts, station infrastructure, steel mill bridges, and gauge conversion projects
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The company operates a ready-mix concrete plant and holds an AA rating for infrastructure execution
Conclusion
The proposed equity share split by A B Infrabuild Ltd is more than a technical adjustment—it’s a signal of the company’s evolving capital market strategy and its intent to democratize ownership. Coupled with strong financials and a successful rights issue, the move could catalyze greater investor engagement and reinforce the company’s position as a rising star in India’s infrastructure sector.
Sources: Chittorgarh.com, BSE India, India Infoline.
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