A Mauritius-based FII buys a stake in a multibagger stock that has risen 300% in 2 years. | Daily News Byte

Tirupati Forge Shares is one of the NSE SME stocks which has given attractive returns to its shareholders since its listing in the Indian markets. The SME stock was listed on the NSE SME Exchange in October 2017. Here was a decent listing of multibagger SME stocks ₹34.80 against its fixed issue price ₹29 per equity share, delivering a 20 per cent listing premium to its lucky allottees. However, NSE SME stocks do not end here. The small-cap company announced bonus shares and a stock split, further benefiting its long-term previous investors.

Announcement of bonus shares, stock split

After a strong opening on the NSE SME Exchange, the SME-sized small-cap company announced a stock split in the ratio of 1:5 in October 2021 while it announced bonus shares in the ratio of 3:4 in October 2021. So, if one had invested in the allotment then the shareholding in the company would have gone up manifold, once this SME stock had been successfully listed at a premium of 20 per cent.

Multibagger IPO

The NSE SME IPO is one of the multibagger IPOs that the Indian secondary market has produced in recent years. A public issue was offered at a fixed price of ₹Each of the 29 bidders had to apply in lots where one lot consisted of 4000 shares of the company. Therefore, the applicant of this NSE SME IPO was required to make a minimum investment ₹1.16 lakh in this IPO. After the stock is split in the ratio 1:5, the individual’s shareholding in the company increases to 20,000 (4,000 x 5). These 20,000 shares would have gone up to 35,000 as the small-cap company announced three bonus shares for every four shareholdings held by its investors.

Therefore, if an allotment invests in these small-cap SME stocks even after a strong listing, its full value ₹1.16 will have become ₹8.02 lakh today ( ₹22.92 x 35,000).