Websol Energy System, a manufacturer of solar cells and modules, has announced that it will hold a board meeting on September 1 to consider and approve a proposal to split its equity shares. The proposal involves a subdivision of its existing shares, which currently have a face value of Rs 10 each.

The news comes as the company’s stock has shown significant growth, rising 6,000% over the last five years. A Rs 10,000 investment in Websol Energy System at that time would now be worth around Rs 6 lakh. This translates to a five-year return of over 5,700%, reflecting a massive surge in the company’s stock price.

Websol is a small-cap company with a market capitalization of Rs 5,463 crore.

A stock split is a corporate action in which a company increases the number of its outstanding shares by dividing existing shares into smaller units. The primary purpose is to make the stock more affordable and accessible to a wider range of investors, potentially boosting trading activity and market liquidity.

While the number of shares increases and the price per share decreases, the company’s overall market capitalization and an investor’s total holding value remain unchanged. For instance, in a 2-for-1 split, a shareholder would receive two new shares for every one they currently own, and the price of each share would be halved. The total value of their investment, however, remains the same as before the split.

The board meeting will also consider an alteration of the company’s Memorandum of Association, subject to shareholder approval.Websol Energy manufactures photovoltaic crystalline solar cells and modules. Its products are used for solar energy panels in both commercial and industrial applications in India and abroad. The company has a reputation for producing reliable, high-quality solar products and has received various international certifications.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)