On Wednesday, after market hours, the board of directors of HDFC Bank approved the proposal to split the lender's shares with a face value of Rs 2 to two shares with face value of Re 1 each.

In a regulatory filing, the bank said, "Owing to the bank's strong financial performance and sound asset quality, the market price of the bank's equity shares has grown steadily over the past several years."

It further said that the stock split will augment affordability of the stock and increase participation of retail and individual investors, thereby improving liquidity in the bank's equity.

Shares of HDFC Bank gained as much as 1.42 percent to an intraday high of Rs 2,439.90 apiece. It is the second consecutive session of gains for the stock.

The proposal is now subject to approval from the shareholders at the Annual General Meeting (AGM) scheduled to be held on 12 June and, the stock split will take place three to four months following the AGM.

The AGM will also take a final decision on the proposed dividend of Rs 15 per share that was recommended by the board on 20 April.

Previously in 2011, the country's largest private sector bank split it shares in 1:5 ratio, splitting shares worth Rs 10 to 5 shares of Rs 2 each.

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