Shares of Varun Beverages experienced a significant boost of 5 percent in early trading on September 12, as the stock began trading ex-stock split.

The surge comes on the heels of the company's approval of a 2:5 stock split, which resulted in a notable adjustment in the share price.

The stock split, which decreased the price from Rs 1,569.15 to Rs 635.50, was designed to make shares more accessible to smaller investors.

While the split does not impact the company's overall value or an investor's total stake, it increases the number of shares available at a lower price.

This move is often aimed at enhancing trading volume and liquidity.

At 09:46 AM, Varun Beverages shares were trading at Rs 657.90 on the National Stock Exchange (NSE). The record date for the stock split, set by the company's board of directors, was also September 12.

This date determined the shareholders eligible for the split, which involved converting each existing share with a face value of Rs 5 into shares with a face value of Rs 2.

This stock split follows a previous reduction in face value from Rs 10 to Rs 5 in June 2023, further lowering the share’s nominal value.

Prior to the stock split, Varun Beverages' shares had already surged over 3 percent in the previous session as investors anticipated the benefits of the split.

In its latest financial results, Varun Beverages reported a 26 percent year-on-year increase in net profit, reaching Rs 1,262 crore for the June quarter.

This growth was driven by an expansion in volume and improved margins. Revenue also saw a rise of over 28 percent, totaling Rs 7,333 crore, with margins expanding by 74 basis points to 27.7 percent.