J&N stock split puzzles analysts

J&N stock split puzzles analysts
PRESS TRUST OF INDIA

Calcutta, August 7: The board of Jenson & Nicholson, a leading paint manufacturer in the country, today approved stock split of Rs 10 per share into face value of Rs 2 each, company sources said.

The company also proposes to convene an extra-ordinary general meeting to seek shareholders' approval. company chairman S P Sinha, controls the majority stake.

Meanwhile, stock brokers expressed apprehension about the company's motive to split stock. A leading broker said a company goes for a stock split when share prices rises to high levels.

By splitting stocks, prices come down and comes within easy reach of investors. In this case, the stock of J&N is being quoted at Rs 25 per share. In case of a split, the price would drop to Rs 5 per share.

A noted chartered accountant, said on condition of anonymity the J&N stock split decision was "puzzling" as the shares were quoted at a low price.

The company management, however, is tight lipped about the motive for splitting stocks.