AVI Polymers Hits 5% Upper Circuit on Bonus and Stock Split Plan, May 30

Shares of AVI Polymers jumped 5% to Rs 15.21 on May 29, hitting the upper circuit limit after the company announced plans for a 1:10 stock split and 10:1 bonus issue. The board will meet on June 4 to approve the proposals. This move comes as the stock has surged 140% over the past year, making it a strong performer despite broader market weakness.

What the Corporate Actions Mean

Under the 1:10 stock split, each existing share worth Rs 10 will become 10 shares worth Rs 1 each. Combined with the 10:1 bonus, shareholders will receive 10 free shares for every one held after the split. An investor holding 1,000 shares today would end up with 110,000 shares after both actions complete. The company aims to boost liquidity and make shares more accessible to retail investors.

Why the Stock Surged Despite Market Losses

On May 29, the broader market fell hard. The Sensex dropped 1,092 points and Nifty fell 360 points due to foreign investor selling and weak global signals. Yet AVI Polymers opened lower at Rs 13.77 but rallied to Rs 15.21 by close. The bonus and split announcement drove the move. Investors welcomed the capital structure changes as a sign of shareholder-friendly management.

Strong Track Record and Future Plans

AVI Polymers has delivered 140% returns over the past year. The company manufactures polymers, specialty chemicals, detergents, and water treatment products. Beyond the stock split, the board will consider entering green technology and sustainability businesses, including industrial waste management and material recycling. Revenue in Q4 FY26 reached Rs 150.28 crore, showing solid operational performance.

What Investors Should Know

Meyka rates AVI Polymers a B grade with a 12-month price target of Rs 22.38, about 47% above the current price. The stock trades at a PE of 7.04, suggesting low valuation. However, the RSI stands at 35.55, indicating oversold conditions, while the MFI at 95.27 shows overbought momentum. The stock remains highly volatile, having fallen 20% over the past month despite the annual rally.

Final Thoughts

AVI Polymers’ bonus and split announcement drove a 5% rally despite market losses. With Meyka rating the stock B and targeting Rs 22.38, the data points to upside potential, though the recent monthly decline warrants caution.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.