The board of Marico has approved a stock split in the ratio of 1:10. The company will sub-divide each of its equity shares of a nominal value of Rs 10 each to ten shares of Re 1 each.

The board also approved a proposal for financial restructuring of the company.

As per this, the intangible assets of the company will be adjusted against Special Reserves (securities premium account and capital redemption reserve account) under the provisions of Sections 78 and 80 read with Section 100 to 103 of the Companies Act, 1956.

Both proposals are subject to the high court and shareholder approval. There will be an extraordinary general meeting on February 8, 2007, to pass the proposals.

Marico recently raised Rs 150 crore (Rs 1.5 billion) through a private placement of equity shares to qualified institutional borrowers and issued preference shares as a result it has substantial reserves in its securities premium and capital redemption accounts.

Milind Sarwate, chief financial officer, Marico, said, "The company's net worth is Rs 450 crore (Rs 4.5 billion) at present, of which Rs 310 crore (Rs 3.1 billion) would be deducted for the intangible assets (brands). As a result, the balance sheet would shrink and we would have a leaner balance sheet with virtually no intangibles."

Marico has acquired seven brands in the last eighteen months, both in India and abroad. These include Nihar hair oil and Manjal soap in India, soap brands Aromatic, Camellia and Magnolia in Bangladesh, and, recently, haircare brands Fiancee and Haircode in Egypt.

Sarwate said after valuation, the acquired set of brands and homegrown brands such as Parachute and Saffola would be on a level playing field.

The company had carried out a similar exercise in December 2002, where it had ascertained the value of its own brands Parachute and Saffola.