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The board of directors of Tata Steel will consider a stock split at the board meeting to be held on May 3. Tata Steel shares closed 0.1 per cent lower at Rs 1,319.25 on the BSE on Wednesday.
“The company will consider a proposal for sub-division of the equity shares of the company having a face value of Rs 10 each, in such manner as may be determined by the board of directors, subject to regulatory and statutory approvals as may be required and the approval of the shareholders of the company,” the company said in an exchange filing.
According to analysts, stock split is done by a company to increase liquidity in the market after the price of a stock rises beyond the reach of retail investors, making the stock affordable for them.
During a stock split, while the number of outstanding shares rises, the price per equity share gets cheaper proportionately. However, sub-division of shares won’t lead to increase or decrease in the capital.
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