1:10 Stock split effect: Money is not buying or selling stocks but holding them as long as possible. This stock investment idea is known to almost all investors, but those who follow this in their investment journey need to be more numbers. According to successful stock market investors, this idea can also be implemented while investing in IPOs. However, a long-term investor should choose such a public issue after a proper check of the company's fair value launching its IPO in the primary market. Such practice helps an investor create wealth because long-term investors enjoy the benefits of dividends, bonus shares, trade volume rises post-stock split, buyback of shares, etc.
To understand how these benefits enable an investor to create wealth with time, one must look at the journey of Cellecor Gadgets shares. Shares of the company were launched in September 2023 at a price band of ₹87 to ₹92 per share. The SME IPO was proposed for listing on the NSE SME Emerge platform. The SME stock had a flat listing at ₹92, ending at ₹96.60 apiece on the listing date. The stock was listed on 28th September 2023, precisely 11 months before. However, if an allottee had remained invested in the NSE stock post-flat debut, the absolute value of one money would have surged geometrically. But, it is not just the stock appreciation that enables such a whopping rise; a 1:10 stock split has also done the trick.
According to the information available on the NSE, the NSE-listed SME stock traded ex-split on 9th August 2024. The stock traded ex-split to finalise the company's beneficiary shareholders for a 1:10 stock split. This means a beneficiary shareholder's shareholding surged ten times without changing the absolute return. However, post-split, Re one riser would mean a ₹10 (Re 1 x 10) rise for the stock split beneficiary shareholders.
As mentioned, Cellecor Gadgets IPO was launched at ₹87 to ₹92. A bidder applied for the SME IPO in lots, and one lot of the SME IPO comprised 1200 company shares. If an allottee had remained invested in the stock despite flat listing, its shareholding would have surged to 12,000 (1200 x 10).
The IPO was available at the upper price band of ₹92 apiece, and the lot size was 1200 shares. The minimum investment of an allottee was ₹1,10,400. Cellecor Gadgets' share price today is around ₹35 after the price adjustment caused by the stock split. The value of ₹1.10 lakh would have become ₹4,20,000 or 4.20 lakh.
So, in less than one year or 11 months, an allottee of ₹1.10 lakh would have turned into ₹4.20 lakh, provided the allottee had remained invested in the stock throughout the post-listing period.
Cellecor Gadgets Limited, a leading innovator in consumer electronics, has achieved a significant milestone with its inaugural order for this season's Big Billion Sale on Flipkart.
The company has secured a substantial order of 7,000 units, valued at approximately Rs. 10 million. This impressive achievement underscores Cellecor's robust presence in the competitive market and highlights the strong demand for its cutting-edge gadgets.
In addition to this outstanding sales achievement, Cellecor Gadgets Limited has established a strategic alliance with Cred, a prominent fintech enterprise known for its high-end credit card payment solutions.
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