Multibagger SME IPO: A long term investor enjoys some extra benefit over a short term investor or a jobber. They not only earn from stock price appreciation but from various other rewards that a listed company distributes from its capital reserves from time to time. These rewards can be interim, final or special dividend. It can be bonus shares, buyback of shares, stock split to attract more volume in the stock, etc. These rewards may not look attractive at one point of time but in a long term, these benefits help an investor get whopping return due to such corporate actions.
To understand how these rewards can change fortunes of a long term investors, we need to look at Shreeji Translogistics IPO. This SME IPO has went through one bonus share and one stock split in 2:1 and 1:5 ratio respectively. This led to rise in shareholding of a lucky allottee from 1,000 to 15,000 i.e. 15 times. So, now Re 1 changed lead to ₹15 change in the shareholders’ fortunes provided he or she is a lucky allottee who remained invested in the SME scrip after listing.
Shreeji Translogistics IPO details
The Initial Public Offering (IPO) of Shreeji Translogistics Ltd is one of the multibagger IPO that Indian primary market has produced after hitting the secondary market. Shreeji Translogistics IPO was launched in October 2017 and it was listed on BSE SME exchange on 13th October 2023. The public issue was offered at a fixed price band of ₹130 per share and one lot of the SME IPO comprised 1,000 company shares. So, minimum investment of an allottee would have been ₹1.30 lakh ( ₹130 x 1,000).
2:1 bonus share impact
As per the information available on BSE website, this SME stock traded ex-bonus on 14th October 2019 for issuance of bonus shares in 2:1 ratio. This means, eligible shareholders of the company were given two bonus shares for holding one share of the company on bonus share record date. So, if a lucky allottee had remained invested in this SME scrip after listing on BSE, then its shareholding in the company would have surged to 3,000 i.e. three times after issuance of 2:1 bonus shares.
1:5 stock split impact
On 15th February 2023, this SME stock traded ex-split as board of directors of the company had declared stock subdivision in 1:5 ratio. Means one stock of the company having face value of ₹10 per share were broken into five company shares with a face value of ₹2 per share. So, after 1:5 stock split, a lucky allottees shareholding ascended give times. So, those who remained invested in the scrip after allotment and listing, their shareholding in the SME stock went to 15,000 (3,000 X 5).
₹1.3 lakh turns to ₹10.30 lakh
Shreeji Translogistics share price today is ₹68.70 apiece on BSE. So, if a lucky allottee of the SME IPO had remained invested in this stock till date, its ₹1.30 lakh would have turned to ₹10,30,500 or ₹10.30 lakh in the last six years.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 10 Aug 2023, 02:11 PM IST