Government-backed largest aerospace and defense company, Hindustan Aeronautics witnessed a strong buying on Friday after it announced plans to consider a stock split. Today, the stock gained by more than 7% and also touched a new 52-week high. But the stock has been on a winning streak for six consecutive trading sessions. Overall, the June month has started on a bullish note for the stock.
At the time of writing, HAL traded at ₹3692.75 apiece, surging by ₹165.05 or 4.68%. However, the stock has zoomed by 7.3% with a new 52-week high of ₹3785 apiece in the second half of the current trading session.
On Thursday, in its regulatory filing, HAL said, a meeting of the board of directors of the company will be held on Tuesday, the 27th of June, 2023, to consider a proposal for the sub-division of equity shares.
Generally, in a stock split, the listed company increases the number of shares that are outstanding by issuing more shares to the current shareholders. The stock split also decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company.
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Among many benefits of the stock split, is also that these shares become more affordable for both existing and new investors. Additionally, the move boosts the listed company’s liquidity.
HAL shares have been on a winning streak for six consecutive days now. The stock has advanced by 22.90% since June 2nd.
Earlier this week, in a research note dated June 7th, ICICI Securities highlighted that HAL’s order book is likely to be boosted further.
The brokerage’s note added, “HAL is optimistic on securing a contract worth Rs120bn for production of 12 additional Su-30MKI multirole fighters for the Indian Air Force by next year (FY25). Besides, management expects contract negotiation for 240 units of AL31FP engines at Rs260 billion to be concluded soon.”
Further, the brokerage’s note added, “HAL and General Electric are set to sign an agreement that will pave the way for development of infrastructure to support production and testing of new F414-INS6 engine for Tejas Mk2 fighter jet in India.”
Finally, ICICI Securities said, “It is anticipated that ToT and a percentage of local components will exceed 60%, thus, boosting domestic ecosystem. While baseline F414-INS6 engine (98KN) is also selected to power Twin-Engine Deck-Based Fighter (TEDBF) and AMCA Mk1, upgraded versions- F414-EPE and ceramic matrix composite enhanced core have the potential to cross 116KN and 130KN of thrust, respectively.”
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Updated: 09 Jun 2023, 03:27 PM IST