Tata Steel on Tuesday approved a proposal to split its shares in a 10 to 1 ratio as the steel major reported a 47% rise in consolidated net profit for the three months ended March.
stay on net profit 9,756 crore for the January-March period 6,644 crore a year ago.
Shares of Tata Steel closed up 2.04% on Tuesday 1,297 each on the NSE. So far in 2022, the stock has risen about 14% (year-to-date).
The division will be subject to regulatory and statutory approvals.
A stock split increases the number of shares outstanding by issuing more shares to existing shareholders. A stock split reduces the market value of individual shares, however, the market capitalization of the company does not change.
A company engages in a stock split decision to make its stock more affordable if its price level is too high, which will increase the liquidity in the stock.