This Tata Group company announces 1:10 stock split: What it means for shareholders?
Tata Investment Corporation stock split: The Tata Group company said it has approved the stock split in order to "enhance the liquidity of Company's equity shares and to encourage participation of retail investors by making equity shares of the Company more affordable".
Tata Investment Corporation on August 4 announced its first-ever stock split in the ratio of 1:10. This means that every single share held by its eligible shareholders will be split into 10, without changing the overall value of their holding.
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In an exchange filing, Tata Investment Corporation announced that its board of directors has considered and approved the split of one existing equity share of the company with a face value of Rs 10 each into 10 equity shares with a face value of Rs 1 per share.
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The record date to determine the eligibility of the shareholders set to receive the payment is yet to be announced. Notably, shareholders must own the stock as on the record date to be eligible to enjoy the stock split.
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If approved, this will be the first stock split conducted by the company. The Tata Group company said it has approved the stock split in order to "enhance the liquidity of Company's equity shares and to encourage participation of retail investors by making equity shares of the Company more affordable".
If a shareholder owns 1 share of Tata Investment Corporation worth Rs 10 each, he will own 10 shares of the company after the stock split, with each share being worth Rs 1. However, the total worth of his holding will remain unchanged at Rs 10.
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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.
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Along with the stock split, Tata Investment Corporation also released its results for the first quarter of the financial year 2026. The company's net profit rose 12 percent on-year to Rs 146 crore in Q1 FY26. Its revenue from operations meanwhile increased more than 2 percent on-year to Rs 145.5 crore during the April-June quarter of the ongoing financial year.
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Tata Investment Corporation shares sharply gained 6 percent to hit an intraday high of Rs 7,165 apiece. The stock then pared some gains to trade over 3 percent higher at Rs 7,011 apiece, as seen at 2 pm. The shares of the company have risen more than 4 percent in the past one month, and nearly 18 percent in the past six months. The stock currently has a P/E ratio of more than 164.
The sharp rise in the share price also comes ahead of Tata Capital's much anticipated initial public offering. Tata Investment Corp owns 2.2 percent of Tata Capital. And Tata Sons holds nearly 93 percent stake in the non-bank lender. Tata Capital’s IPO will involve Tata Sons offloading up to 23 crore shares, while International Finance Corporation is expected to sell 3.58 crore shares. Additionally, the company plans to issue up to 21 crore fresh shares, according to reports.
