Tata Investment Corporation Ltd.’s share price rose as much as 10.48% during trade so far to Rs 9,769.5. The scrip rose over 14% in the last week and on Sept. 23 had risen 13.31%, to its 18-month high.
The company had announced the record date of stock split earlier last week, fixing it as Oct. 14. On Aug. 4, the company had announced that it has approved the plan to split its stock in the ratio of 1:10. Accordingly, the stocks of Rs 10 per share face value will be reduced to Rs 1 per share face value.
“Existing 1 (one) Equity Share of face value Rs 10 (Rupees Ten only) each, be sub-divided into 10 (ten) Equity Shares having face value of Rs 1 (Rupee One only) each, fully paid-up,” the filing stated.
The rationale behind the stock split is to enhance the liquidity of company’s equity shares and to encourage participation of retail investors by making equity shares more affordable, it further said.
The record date determines shareholder eligibility to qualify for the corporate action. Under India’s T+1 settlement cycle, shares purchased on the record date itself will not qualify for the stock split. Hence, if the record date is Sept. 22, then shares must be purchased by Sept. 19.
The ex-date, which typically coincides with the record date, marks when the share price adjusts to reflect the share subdivision.
