Shares of Schaeffler India plunged more than 3% to ₹1,708 apiece on the BSE in Wednesday’s trading session as the stock started ex-split on record date today. The company had set February 9, 2022 as the record date for the sub-division of equity shares or called as stock split.
Schaeffler India’s stock split comprised of One (1) Equity Share having face value of Rs. 10/- each (Rupees Ten Only) into Five (5) Equity Shares having a face value of Rs. 2/- each (Rupees Two Only), the company had announced.
The ball and roller bearing manufacturing company in October 2021 had announced its proposal of sub-division of equity shares of the company, which the board had approved. The stock has rallied over 72% in a year’s period, whereas it is down about 6% in 2022 (year-to-date or YTD) so far.
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. Stock split decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company.
A company engages in stock-split decision to make its stock more affordable if its price levels are very high, which in thus would lead to increase in liquidity in the stock.
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