Sapphire Foods Splits Equity Shares in a 1:5 Ratio 

The Board of Directors of Sapphire Foods decided to split its Equity share in the ratio of 1:5 without raising the overall share capital value. The rationale for this is to increase the shareholder base. 

by Damodharan N

Updated Jun 20, 2024

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Sapphire Foods Splits Equity Shares in a 1:5 Ratio

Sapphire Foods India Limited has announced a subdivision of its equity shares during a Board of Directors meeting held on June 19th. The company will be splitting its existing equity shares in a 1:5 ratio, subject to shareholder approval at the upcoming 15th Annual General Meeting.

Currently, each equity share has a face value of Rs. 10. Post-split, each share will be divided into five equity shares with a face value of Rs. 2 each. This move aims to enhance liquidity in the capital markets, broaden the shareholder base, and make the shares more affordable for retail investors.

In addition to approving the share split, the Board also proposed altering the Capital Clause (Clause V) of the Memorandum of Association (MoA) to reflect the subdivision. The date of the Annual General Meeting and the record date for the share split will be announced in due course.

Pre- and Post-Split Share Capital:

  • Authorized Share Capital:
    • Pre-Split: 46,70,12,000 shares at Rs. 10 each
    • Post-Split: 233,50,60,000 shares at Rs. 2 each
  • Issued, Subscribed, and Paid-up Share Capital:
    • Pre-Split: 6,37,56,522 shares at Rs. 10 each
    • Post-Split: 31,87,82,610 shares at Rs. 2 each

The company expects to complete the share split within three months from the date of member approval, pending necessary formalities. All equity shares will rank pari-passu post-split.

Read the full release here.

Share Split in Sapphire Foods

The most publicly floating companies in the share market always have a desire to have multiple ways to gain capital and trust in the market. In a country like India, after the COVID-19 and the explosion of Fintech firms that help navigate the share market with the touch of a smartphone, the desire to deep dive into the share market is never before higher.

So, people who are in tier-three cities are trying their hands out by investing in the share market. To tap into hitherto unreached markets, some firms are splitting the shares without raising the price of their shares and absorbing that capital into them, which, in turn, gives them good dividends. 

Sapphire Foods is also one of them, which just started its journey in 2015, growing leaps and bounds, and floated the firm in 2021 with a starting price above 1100 Rs in the IPO. The firm wants to lower the price ratio of the individual shares in the mid-range.

However, with the share price hovering around 1600Rs, how is the market going to react? We have to wait and watch whether they can crack the untapped markets in tier-3 Indian cities. 

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About Sapphire Foods 

Established in September 2015, Sapphire Foods emerged through the acquisition of around 270 KFC and Pizza Hut stores in India and Sri Lanka by leading private equity firms. The company aims to become the best restaurant operator in India, focusing on enhancing customer experience, ensuring food safety, and promoting cost efficiency.

Sapphire Foods is rapidly expanding its restaurant base while building a strong supply chain and fostering a values-based work environment. The company's core purpose is to serve great food with excellent experiences at a great value every day, driven by a team of empowered professionals dedicated to personal and professional growth.

Sapphire Foods Splits Equity Shares in a 1:5 Ratio - FAQs

1. What is the ratio of the share split announced by Sapphire Foods?  

The 1:5 ratio, meaning one share of Rs. 10 will be split into five shares of Rs. 2 each.

2. Why is Sapphire Foods splitting its equity shares?  

To increase liquidity, broaden the shareholder base, and make shares more affordable for retail investors.

3. When will the share split be effective?  

The share split will be effective within three months from the date of shareholder approval.

4. Will the overall value of my shares change after the split?  

No, the overall value of your shares will remain the same; only the number of shares and their face value will change.

5. What will be the new face value of each share after the split?  

The new face value of each share will be Rs. 2.

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