Avro India Approves 1:10 Stock Split for Easier Investor Access

The face value of Avro India's equity shares will decrease from ₹10 to ₹1 after the split, with the total number of outstanding shares increasing tenfold to significantly boost liquidity.

What Happened

Avro India Limited's board of directors has approved a 1:10 stock split, a decision aimed at increasing share affordability and liquidity for retail investors. The company also plans to alter its Memorandum of Association (MoA) to reflect the change in its capital structure, reducing the face value of each equity share from ₹10 to ₹1. These proposed changes require shareholder and regulatory approvals.

Why It Matters

Stock splits are often viewed positively by markets as they can make shares more accessible to a wider investor base, potentially leading to increased trading volumes. For Avro India, this split aims to broaden share ownership and attract more retail participation.

Company Background and Financial Health

This is not Avro India's first stock split; the company previously executed a 31-for-10 split, with shares trading ex-split from January 27, 2022. However, recent financial results have raised concerns. For the quarter ending March 2025, Avro India reported an 18.99% drop in net sales and a profit before tax (PBT) loss of ₹0.91 crore. The company's reliance on non-operating income, which covered more than 200% of its PBT in the March 2025 quarter, has also sparked questions about its core business sustainability. Market sentiment has been volatile, with the stock hitting its 5.0% lower circuit limit on March 13, 2026, amid significant selling.

Immediate Effects of the Split

The stock split will result in a tenfold increase in outstanding shares, with the price per share decreasing proportionally to appear more affordable. The company's capital structure within its MoA will be updated, potentially making it easier for retail investors to build larger positions.

Risks and Considerations

The stock split and MoA alteration are subject to shareholder approval at the upcoming EGM and necessary regulatory clearances. Furthermore, the company's recent financial performance, including its dependence on non-operating income, could continue to impact investor sentiment regardless of the split.

Peer Comparison

Avro India operates in the plastic products sector, including furniture manufacturing. Its peers include:

• Supreme Industries: Last split its face value from ₹10 to ₹2 in 2010.
• Prince Pipes & Fittings: Has not announced a stock split since 2018.
• Nilkamal: Has not undertaken a stock split in recent years.
• Shish Industries: Announced a 1:10 stock split in December 2024 to enhance liquidity and affordability.

What to Track Next

Investors will be watching for the outcome of the shareholder vote at the Extraordinary General Meeting (EGM) on April 18, 2026, and the subsequent receipt of regulatory approvals. The company's communication regarding the record date for the split and its ability to improve financial performance amidst recent challenges will also be key.