Nippon Life India shares zoom 20% to hit upper circuit as stock trades ex-dividend

Shares of Nippon Life India Asset Management Ltd soared 20 per cent in Friday's trade as the stock went ex-dividend. While reporting the March 2023 quarter (Q4 FY23) earnings, the company also mentioned that it has approved a dividend payout of Rs 7.50 and the record date for which was scheduled for June 30. Those who held the stock before June 30 are eligible for the dividend. The dividend would be paid on July 19, once approved by its Board members in the ensuing Annual General meeting (AGM) scheduled to be held on July 12.

HDFC AMC today touched its 20 per cent upper price band level of Rs 301.25 over a previous close of Rs 251.05. Around 10.54 lakh shares changed hands on BSE, which was way more than the two-week average volume of 42,000 shares. Turnover on the counter stood at Rs 30.59 crore, commanding a market capitalisation (m-cap) of Rs 18,521.59 crore. There were 67,163 buy orders today against sell orders of 21,351 shares.

At today's high price of Rs 301.25, the stock traded 52.84 per cent higher from its 52-week low of Rs 197.10, a level seen on March 28, 2023. That said, it has slipped 7.59 per cent from its 52-week high of Rs 326, hit on August 16 last year.

"The Board has also recommended a final dividend of Rs 7.50 per equity share of Rs 10 each for the financial year ended March 31, 2023, for the approval of the shareholders at the ensuing AGM. With this the total dividend for the financial year 2022-23 would be Rs 11.50, including the interim dividend of Rs 4 per equity share distributed in November 2022," Nippon Life stated.

In addition, Nippon Life would hold a Board meet on July 27. "A meeting of the Board of Directors of Nippon Life India Asset Management will be held on Thursday, July 27, 2023, inter alia, to consider and approve the unaudited financial results of the Company for the quarter ended June 30, 2023," it said.

Today's sharp upward move, an analyst said, can also be related to the outcome of recent Sebi (Securities and Exchange Board of India) board meeting, in which the proposed reduction in expense ratio was deferred.

Ravi Singh, Vice-President and Head of Research at Share India, said, "The surge can be attributed to the recent Sebi board meeting where the suggested reduction in expense ratio was postponed.  As a result, there is a growing interest in purchasing AMC stocks, as the market anticipates that the profitability of these asset management companies will likely stay steady in the near future."

The company's total income was at Rs 388 crore during Q4 FY23 as against Rs 372 crore in Q4 FY22. Operating profit came at Rs 200 crore, same as Q4 FY22. Profit after tax was at Rs 198 crore during the quarter ended March 2023 as against Rs 175 crore in the year-ago quarter.

On technical setup, the counter's 14-day relative strength index (RSI) came at 84.66. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 22.54. It has a price-to-book (P/B) value of 4.72.

The scrip has a one-year beta of 0.76, indicating low volatility.

Nippon Life manages assets of Nippon India Mutual Fund.

Meanwhile, Indian equity benchmarks continued their record run in today's deals and touched fresh all-time high levels. The surge was supported by gains in technology, pharma, banks, financials and automobile stocks.

Also read: Market extends record run as Sensex tops 64,550; Nifty breaches 19,150: Investor wealth jumps over Rs 3.91L cr in 2 days; Nippon Life jumps 20%

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