Affordable Wellness? Zydus Board Mulls Share Split to Widen Investor Pool

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Zydus Wellness Ltd., one of the leading players in India's FMCG space, has said its board will soon deliberate on a proposal for a share split-a step that can make its shares more available to a broader investor base and could improve market liquidity.

Key Highlights:

Board Meeting on Share Split: Zydus Wellness has notified the exchanges that its board would consider and hopefully clear a stock split. Although specifics like the ratio of split and record date are still to be decided, the notification indicates the company's intent to make its shares cheaper and more appealing, particularly for retail investors.
Share Performance and Structure: The shares of the company are currently priced at around ₹1,690, with a market capitalization of more than ₹10,700 crore. Zydus Wellness has been a history of rewarding shareholders in the form of dividends and judicious capital actions, but this would be its first share split in recent times.
Analyst and Market Reaction: Analysts think that a share split would enhance trading volumes and increase the investor base, especially since the high price of the stock has discouraged retail participation. The fundamentals of the company are still sound, with stable revenue growth and stable profitability, as evident from its latest quarterly results and favorable brokerage outlook.
Recent Financials: Zydus Wellness reported Q4 income of ₹465.7 crore and maintains a sectoral market cap rank of 20 among FMCG peers, with a PE ratio of 33 and a dividend yield of 0.3%.
Next Steps: The outcome of the board meeting and further details on the share split will be closely watched by investors and market participants.

Zydus Wellness's contemplation of a share split reflects its focus on building shareholder value and market penetration as it expands in the competitive FMCG segment.

Sources: Moneycontrol, Economic Times