Mazagon Dock Shipbuilders share price down nearly 9%. Know why

Mazagon Dock Shipbuilders Ltd. shares dropped as much as 9% on Tuesday ahead of a board meeting to discuss a potential stock split. This marks the first time in the company’s trading history that it will consider such an action. Shares of the company were trading 8.75% lower at Rs 4,257.55 on the Bombay Stock Exchange (BSE) at 12:55 pm.
Although the company has issued dividends in the past, it has never carried out a stock split or issued bonus shares.
Currently, Mazagon Dock shares have a face value of Rs 10 each. Alongside the stock split proposal, the board will also consider a dividend for shareholders, following the Rs 12.11 per share final dividend declared earlier for FY24.
Retail interest in the company has grown substantially. The number of retail shareholders increased from 4.64 lakh in the June quarter to 6.56 lakh by the end of September, with retail ownership rising from 9% to 10.6% in that period. This marks a doubling of retail shareholders over the last year.
However, foreign portfolio investors have reduced their stake from 2.44% in June to 1.45% by September. Mutual funds, although holding less than 1% of the company, slightly increased their share from 0.68% to 0.76% in the same period.
The stock, which reached a record high of Rs 5,860 in July, is now down 26% from those levels.
Despite the current correction, Mazagon Dock’s shares have risen 120% over the past 12 months. As of September, the government still holds 84.83% of the company, above the required minimum public shareholding of 75%.