On May 22, the country’s most valued private lender by market value HDFC Bank will consider a proposal to split the face value of its shares. The bank is determined to cut the face value from Rs 2 to Rs 1 a piece, significantly looking forward that will increase the liquidity.
This seems the second time that HDFC Bank is splitting the stock’s face value. In July 2011, the bank has split its stock value in the ratio of 1:5 where one share of Rs 10 split into 5 shares of Rs 2 each. Shares of the bank rallied 17 per cent in the last one year to close at Rs 2328.40 on Monday.
Splitting of the stocks would significantly help the share price to come down which could increase its popularity amongst retail investors. Market participants perceive lower denomination of a stock as a cheaper one.
Read EquityPandit’s HDFC Bank Outlook for the Week