Nestle India board on Thursday approved a stock split in the ratio of 1:10. This is the first time that the board of the FMCG giant has approved a share split.

The company in a filing to the stock exchanges said that the record date for the stock split for existing equity shares will be intimated in due course. The FMCG major informed the bourses that the board of directors, at the meeting held on October 19, approved the division of equity shares in 1:10 ratio, which means that each equity share that an investor holds of face value of Rs 10 each will be now split into 10 equity shares of face value of Re 1 each.

A stock split helps a listed company to create more shares by dividing the existing shares into multiple new shares. This increases the total number of outstanding shares and the total quantity of securities in circulation, enhancing the liquidity in the market. In this process, every shareholder receives additional shares in direct proportion to their existing holdings on the specified record date, ensuring that their ownership percentage in the company remains unchanged.

The stock split will reduce Nestle India’s existing share price to one-tenth of the current price levels, making the shares more affordable for retail investors.

Along with the stock split, Nestle India also announced its September quarter results and a second interim dividend of Rs 140 per equity share, with the total payout amounting to Rs 1,349.82 crore. The dividend will be paid from November 16. This is in addition to the first interim dividend of Rs 27 per equity share announced earlier, the company said.

The Nestle and KitKat maker’s profit surged 36 per cent year-on-year in the quarter to Rs 908 crore as against Rs 668.3 a year ago. The total revenue of the company was at Rs 5,036 crore, rising 9.6 per cent from Rs 4,591 crore a year ago.

Nestle India’s revenue for the third quarter has increased 9.5 per cent to Rs 5,036.8 crore from Rs 4,601.8 crore in the year-ago period. At the operating level, earnings before interest, tax, depreciation and amortization (EBITDA) in the July-September quarter rose 21.3 per cent to Rs 1,225 crore from Rs 1,009.6 crore, year on year. EBITDA margin also decreased 220 basis points (bps) to 24.3 percent from 22.1 percent year on year.

Shares of Nestle India closed 0.6 percent higher at Rs 24,266.60 apiece on BSE on Friday.