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Jubilant FoodWorks to consider stock split on Feb 2; Domino’s operator’s shares jump 3% – CNBCTV18

Jubilant FoodWorks will consider splitting its equity shares, which currently have a face value of Rs 10 each, at the company’s board meeting on February 2, it said in an exchange filing on Friday.

A stock split increases the number of shares of a firm without diluting its value, with each share available at a price lower than the current value (Rs 10 per share in this case). Following the split, the stocks appear more affordable and less intimidating to the investors, which leads to a rise in demand.

Jubilant FoodWorks shares leaped to the green territory after the fast food operator announced its share split proposal. The board will also consider the firm’s earnings for the quarter ended December 31, 2021.

The Jubilant FoodWorks stock rallied as much as 2.8 percent on BSE to an intraday high of Rs 4,027.35 following the development, indicating investors have welcomed the proposal.

At 2 pm, the shares of Domino’s Pizza’s operator in India were up 0.27 percent at Rs 3928.55 on BSE, after having traded in the red for much of Friday’s session. On NSE, the stock was trading 0.23 percent higher at Rs 3,927.50.

The upward movement in the stock came on in an otherwise weak trading session with benchmarks Sensex and Nifty50 in the red due to weakness across most sectors.

The Jubilant FoodWorks shares have given investors a return of more than 41.5 percent in the last year as against Sensex returns of 23 percent during the period.

Earlier in December 2021, global brokerage Morgan Stanley had stated that though stock valuation is high, the market will continue to be willing to pay for Jubilant FoodWorks’ strong market share gains, technology platform, revenue growth strategy and expanding addressable market.

The food service company holds the master franchise rights for three international brands, Domino’s Pizza, Dunkin’ Donuts and Popeyes, addressing three different food market segments.

Jubilant FoodWorks currently operates more than 1,435 outlets for Domino’s Pizza, Dunkin’ Donuts and Hong’s Kitchen and is a market leader in the pizza segment.

In October 2021, the board of Indian Railway Catering and Tourism Corporation (IRCTC) decided to split its stock in the ratio of 1:5, cutting its face value from Rs 10 to Rs 2 each. IRCTC shares witnessed a massive rally, rising nearly 16 percent higher the day the stock traded ex-split.

(Edited by : Ajay Vaishnav)