KARACHI: Lucky Ce­­m­ent has announced plans to sub-divide its shares, reducing the face value from Rs10 to Rs2 per share in a five-for-one stock split, the company announced in a stock exchange filing on Friday.

Once the stock split be­­comes effective, the existing 293 million ordinary shares will be multiplied by the stock split factor of 5, resulting in 1,465 million ordinary shares. Each share’s pre-split stock price will be divided by the same factor.

The recommendation was made in its board me­­eting held on Thursday, which is subject to appro­val by its shareholders in an Extraordinary Gen­eral Meeting (EoGM) to be held on March 18.

Stock splits are a common strategy companies use worldwide to enhance market accessibility, liq­u­idity, and investor participation. By reducing the price per share, compan­ies make their stock more affordable to a broader range of investors, particularly small and retail investors, fostering a more inclusive shareholder base.

A split also increases the number of shares in circulation, improving market liquidity and making trading more efficient without causing price volatility.

Moreover, a stock split signals confidence in a company’s financial str­ength and long-term prospects, reinforcing investor trust and positioning the company for sustai­ned success. Unlike issuing bonus shares with tax implications, stock splits provide a tax-efficient mechanism for shareholders to benefit from a company’s growth.

Published in Dawn, February 22nd, 2025