On Friday, shares of Muthoot Finance rose by 3 percent to Rs Rs 1,144, the fourth straight day of gains after the non-banking finance company said that its board of directors will meet on 18 July to consider the proposal for a stock split.
In a regulatory filing, the company said its a meeting of the board is scheduled to be held on July 18, to consider and approve the proposal for sub-division/stock split of equity shares of the company, subject to shareholders approval.
Stock split divides existing shares of a company into multiple shares to boost the liquidity of the shares. Although the number of shares outstanding increases, the total value of the shares remains the same compared to pre-split amounts. Companies consider stock split to lower the trading price of the stock so that more retail investors are encouraged to buy the shares.
Further, the board will seek approval of shareholders for increase the borrowing powers of the company from existing Rs 50,000 crore to Rs 75,000 crore, the filing added.