Som Distilleries rises 5% after record monthly sales and stock split announcement

Som Distilleries Limited reported its highest-ever monthly beer sales in Karnataka since entering the market a decade ago. The company, that makes Hunter Beer, did not disclose any figures in the regulatory filing submitted to the exchanges.

Following the announcement, shares of the spirit maker rose as much as 6.2% in intraday trade to hit ₹304.40 per share on Thursday, before closing 5.2% higher at ₹301.25 on the NSE. Notably, the stock is up over 14% so far this week.

On April 2, the company’s board of directors approved a stock split in the ratio of 5:2. The Board “considered sub-division of each of the equity share capital of face value of ₹5/- each into equivalent number of equity shares having a face value of ₹2/- each,” as per the exchange filing.

What is a stock split?

A stock split is a corporate action wherein the company increases the number of shares outstanding by reducing the face value of the stock. This is generally done to boost the liquidity of the company’s shares in the stock market and make the stock more affordable for investors. Upon stock split, the number of shares of that company increases, but its market cap continues to remain the same. The stock price gets adjusted according to the split ratio.

In the case of Som Distilleries, this is the second stock split undertaken by the company. In 2020, the company initiated another stock split in a 1:2 ratio by subdividing the face value of shares from ₹10 per equity share to ₹5 per equity share.

In its board meeting held on April 2, the company also approved the change of its name from Som Distilleries Breweries & Wineries Limited to Som Distilleries and Breweries Limited.

Som Distilleries is engaged in the manufacture and sale of beer and Indian-made foreign liquor. The stock hit a 52-week high of ₹390 on October 5, 2023, and a 52-week low of ₹142.38 on April 10, 2023. In the quarter ending December 31, 2023, the company reported standalone sales of ₹154.08 crore, as compared to ₹87.26 crore reported a year ago. Meanwhile, its Q3 net profit stood at ₹8.59 crore, up 111% YoY.