Pavan Industries Ltd, a prominent player in India’s automotive components sector, has announced that its Board of Directors will meet on July 2, 2025, to deliberate a stock split proposal and potential changes in the company’s authorized share capital. The move is aimed at enhancing stock liquidity, improving affordability for retail investors, and aligning the capital structure with future growth plans.
The company disclosed this development in a regulatory filing on June 28, 2025. Despite a minor dip in share price on the same day, investor interest has surged in anticipation of the corporate action.
📌 Key Corporate Action Details
| Parameter | Details |
|---|---|
| Board Meeting Date | July 2, 2025 |
| Proposed Action | Stock Split & Share Capital Change |
| Current Face Value | ₹10 per share |
| Proposed Split Ratio | To be decided by the board |
| Market Capitalization | ₹560+ crore |
| FY25 Net Sales | ₹308.24 crore |
| FY25 Net Profit | ₹8.04 crore |
| Promoter Holding (Mar 2025) | 61.50% |
| FII Holding (Mar 2025) | 6.18% |
| Public Holding | 32.32% |
🏭 Company Overview
Established in 1994, Pavan Industries manufactures a wide range of automotive components for two-wheelers, three-wheelers, passenger, and commercial vehicles. Its product portfolio includes:
- Steering-cum-ignition switches
- Fuel tank caps
- Throttle bodies and carburetors
- Electrical accessories like wheel locks, helmet locks, and fuel cocks
- Casting components and latches
The company has built a strong OEM client base and continues to expand its product offerings to meet evolving industry demands.
📈 Financial Performance Snapshot
In Q4 FY25, Pavan Industries reported:
- Net Sales: ₹66.23 crore
- Net Profit: ₹1.82 crore
For the full fiscal year:
- Net Sales: ₹308.24 crore
- Net Profit: ₹8.04 crore
- PE Ratio: 7x
- Return on Equity (ROE): 5%
- Return on Capital Employed (ROCE): 10%
📊 Stock Performance Overview
| Timeframe | Price Movement |
|---|---|
| 1 Month | +3% |
| 6 Months | -17% |
| 1 Year | -28% |
| 5 Years | +388% |
| 52-Week Low | ₹293.30 |
| Current Price | ₹403.10 |
Despite a 2.34% decline on June 28, the stock remains under investor radar due to the upcoming board meeting and potential stock split.
🔍 What Is a Stock Split?
A stock split increases the number of shares outstanding by dividing existing shares into multiple units. For example, in a 1:5 split, each ₹10 share becomes five ₹2 shares. This:
- Enhances liquidity
- Makes shares more affordable for retail investors
- Does not affect the company’s market capitalization or shareholder value
The final split ratio and record date will be announced post board and shareholder approval.
📉 Shareholding Pattern (as of March 2025)
Promoters: 61.50%
FIIs: 6.18%
Public: 32.32%
The entry of foreign institutional investors (FIIs)—who acquired over 8.6 lakh shares this year—signals growing confidence in the company’s fundamentals.
🧠 Strategic Implications
The proposed stock split and capital restructuring are expected to:
- Improve trading volumes
- Attract retail investors
- Enhance market visibility
- Prepare for future fundraising or expansion
Analysts believe the move could also pave the way for listing on broader indices or institutional coverage, depending on post-split performance.
Disclaimer:
The above article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. We are not registered with the Securities and Exchange Board of India (SEBI) and are not authorized to offer financial or investment advisory services. Readers are advised to consult with a certified financial advisor before making any investment decisions.
