The shares of Tata Investment Corporation appeared to have crashed nearly 90 percent on October 14 as the stock adjusted to a 1:10 stock split. The shares of the Tata Group company opened at Rs 1,042 apiece on Tuesday, as against the previous closing price of Rs 9,922 apiece.
The company in August had announced that its board has approved a plan to split one shares with a face value of Rs 10 into 10 shares with a face value of Rs 1 each. Notably, this was the first stock split conducted by the Tata Group firm.
What it means for shareholders?
Tata Investment Corp set today (October 14) as the record date to determine the eligibility of the shareholders set to participate in the stock split. This means that a shareholder who owned one share of the company as on the record date will see his one share be split into 10 after the stock split.
A company announces stock split to increase the overall liquidity of the stock. While this increases the total number of shares, it does not change the market capitalization of the company. This makes it more affordable for other investors to add to their portfolio, creating strong upside potential for the stock.
Tata Investment Corp share price: Key details
As a result of the stock split, Tata Investment Corp shares appeared to have crashed around 90 percent, while in reality, they simply adjusted to the corporate action. The stock jumped around 7 percent to trade at Rs 1,057 apiece, as seen at 10.40 am.
Also read: Our LIVE blog on stock market updates
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