Three stocks are set to split in a matter of ten days. Two of them are PSUs, while 1 is a textile company. These are leading public sector lender, Canara Bank, major defence PSU Bharat Dynamics, and penny stock, Vardhman Polytex. The stock split will be carried in the ratio of 1:10, 1:5, and 1:2. These stocks have given double-to-triple-digit returns to investors in a year. All three stocks are splitting for the first time.
1. Canara Bank Stock Split:
This PSB lender is going to split for the first time. The stock split ratio is 1:5, meaning, 1 existing equity share of Canara Bank will be split into 5 smaller shares. Notably, the share capital reserves will remain the same. The face value of Rs 10 will be split into Rs 2 each. The record date for the stock split is fixed on May 15, 2024.
On BSE, Canara Bank's stock ended at Rs 566.25 apiece, up by 3.11% with a market cap of Rs 1,02,725.13 crore. The PSB has surged by 28% YTD, while in a year, the stock rallied by 87% on BSE.
2. Vardhman Polytex Stock Split:
On May 14, this stock touched a new 52-week high of Rs 102.72 apiece. The stock ended at Rs 102.55 apiece, up by 4.82% after market hours with a valuation of Rs 279.87 crore. YTD, the stock rallied by 78%, while in a year, it is up by 173.50%.
This below Rs 105 per share is splitting in the ratio of 1:10. The company fixed Saturday, 18" May 2024" as the "Record Date" for the Sub-division/ Split of equity shares of the company having a face value of Rs. 10/- each fully paid-up into 10 equity shares having face value of Re. 1/- each fully paid-up, ranking pari-passu with the existing shares in all respects, under the approval of shareholders by passing of Special Resolution dated 04th May 2024 through Postal Ballot.
The ex-split date is on May 17.
3. Bharat Dynamics Stock Split:
The biggest upcoming event in BDL is now its 1:2 stock splits. BDL announced that its existing 1 (One) Equity Share of the face value of Rs. 10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of the face value of Rs. 5/- (Rupees Five Only) each fully paid up, subject to shareholders' approval.
The reason why BDL has decided to carry a stock split is to comply with DIPAM Guidelines on Capital Restructuring; To encourage wider participation of small investors, and To enhance the liquidity of the Equity Shares of the Company in the Stock Market.
BDL will be splitting on May 24, 2024. This is also the record date to determine eligible shareholders for the split.
On BSE, BDL's share price ended at Rs 1955.45 apiece, up by 6.76% with a market cap of Rs 35,839.73 crore. YTD, the stock is up by 13.3%, while in a year, the stock zoomed by 92%.
Generally, share splits mean that listed companies can split their existing shares into a ratio decided by them for a host of reasons. These could be done to improve liquidity, lessen the value of the stock, make it cheaper or simply attract new buying from both existing and new investors.
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