Apex Footwear shares plunge nearly 23% after stock dividend adjustment
Following the stock dividend, the company’s paid-up capital rose by Tk4 crore to Tk19 crore, while the number of shares increased by around 45 lakh
Apex Footwear Limited, one of the country's leading footwear manufacturers, saw its share price tumble by 22.95% today (21 October) following a post-record-date adjustment to account for a recently declared stock dividend.
According to data from the Dhaka Stock Exchange (DSE), Apex Footwear's share price stood at Tk257.10 before the record date on 20 October. Trading of the company's shares was suspended that day. When trading resumed, the stock opened at Tk205.70 — a 19.99% decline from the previous session's closing price — reflecting the adjustment of 25% stock dividend declared for the fiscal year 2024-25.
The share price then fell further by 2.96% to close at Tk198.10, bringing the total decline for the day to 22.95%.
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Following the stock dividend, the company's paid-up capital rose by Tk4 crore to Tk19 crore, while the number of shares increased by around 45 lakh.
On 26 September, Apex Footwear recommended a 50% dividend for FY25, consisting of 25% cash and 25% stock, up from 35% cash and 10% stock in the previous year. The proposal will be placed for approval at the company's annual general meeting on 26 November.
Market observers noted that Apex has issued stock dividends for three consecutive years to gradually increase its paid-up capital, in line with a Bangladesh Securities and Exchange Commission (BSEC) directive that requires all main-board listed companies to maintain a minimum paid-up capital of Tk30 crore.
Despite its robust presence as a leading footwear exporter, Apex Footwear's net profit fell to Tk13.55 crore in FY25, down from Tk17.64 crore in the previous year. Consequently, its earnings per share declined to Tk8.62 from Tk11.22 a year earlier.
A senior company official, seeking anonymity, said the profit decline was primarily driven by higher tax expenses due to increased source deductions on export earnings. "Although revenue continued to grow, rising tax deductions and inflation-induced discounts in the domestic market significantly eroded margins," he added.
Industry analysts said the company's long-term fundamentals remain stable, but short-term volatility in share price is a typical market reaction following stock dividend adjustments.
