Stock split: Lucky Cement approves sub division to enhance investor participation

Lucky Cement, one of Pakistan’s largest cement manufacturers, has informed the exchange that its Board of Directors (BoD) has proposed the sub-division of equity shares subject to shareholder approval.

“The Board of Directors of Lucky Cement Limited in their meeting held on February 20, 2025, have considered….to sub-divide the face value of shares of the company from Rs10/- to Rs2/- per share, in accordance with Section 85(1)(c) of the Companies Act 2017, in the ratio of 5 shares for each 1 share held,” read a notice to the Pakistan Stock Exchange (PSX) on Friday.

A subdivision of shares, also known as a share split, is a corporate action that increases the number of shares while decreasing the share price. The overall value of the company and the value of each shareholder’s investment remain unchanged.

Lucky Cement’s earnings jump 21% in 2024

In addition to the split, the board has also proposed amending Clause V of the Memorandum of Association “to reflect the proposed sub-division of shares”.

Sharing the rationale of the share split, the board expressed its gratitude to the shareholders for their continued trust since the company’s inception, saying that the split aims to enhance shareholder value.

“To further enhance shareholder value and broaden investor participation, the board has proposed the above sub-division, making the company’s shares more accessible to a variety of investors and sharing the success achieved over the years with them,” read the notice.

Once the proposal is approved in the Extraordinary General Meeting (EoGM), “the existing subscribed and paid-up capital of the company, currently at 293,000,000 ordinary shares of Rs10/- each, will be sub-divided into 1,465,000,000 ordinary shares of Rs2/- each”.

“Consequently, the eligible shareholders of the company will receive 5 shares in place of every 1 share held as of the date of determination, which will be announced subsequent to the EoGM,” Lucky Cement said.

In a statement, Muhammad Ali Tabba, CEO of Lucky Cement Limited, said that the stock split is aimed at sharing this success story with a broader base of investors, both locally and globally.

“He further highlighted that the company’s strategy of reinvesting profits into growth and expansion has consistently delivered strong results and made it more resilient to economic shocks.

“Citing the company’s two share buybacks, he noted that shareholders who chose to retain their shares will now own a larger percentage of the company for the same initial investment, benefiting from the company’s sustained growth,” read the statement.

The company informed that the EoGM will be convened on March 18, 2025, to vote on the proposal.