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Shares of Multi Commodity Exchange India Ltd trade last day before 1:5 stock split on Jan 2
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Each MCX share of Rs 10 will split into five shares of Rs 2 face value on ex-date Jan 2
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Stock split aims to improve liquidity and retail investor accessibility without changing value
Shares of Multi Commodity Exchange of India Ltd. would be of market interest on Thursday, Jan. 1, as it marks the last session for investors to buy to qualify for the stock split.
MCX will undergo its first-ever stock split on Friday. The board approved the plan for the subdivision of each share in the ratio of 1:5 in August. Each MCX share with a face value of Rs 10 will be split into five shares of Rs 2 face value on the ex-date which is Jan. 2. The stock split will enhance affordability, making it more accessible to retail investors.
The record for MCX stock split for the purpose of determining the eligible shareholders is also Jan. 2.
A stock split is a corporate action where a company increases the number of outstanding shares by reducing the face value per share. This typically enhances liquidity as the stock price adjusts accordingly. While the number of shares increases, the total investment value remains unchanged.
To be eligible for a stock split, investors must hold shares as of the record date announced by the company. The record date determines who will receive additional shares post-split, based on the split ratio. With India following the T+1 settlement cycle, investors need to purchase the stock at least one trading day before the record date to be eligible.
Buying shares on the record date itself won’t qualify, as the ownership won’t be reflected in time during trade.
MCX share price has risen 79% on a year-to-date basis, and 11% in the last one month. The company's total market capitalisation stood at Rs 56,804 crore.
Six out of the 12 analysts tracking MCX have a 'buy' rating on the stock, five recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The average of 12-month analyst price target implies a potential downside of 4%.
The Multi Commodity Exchange is India's leading, listed commodity derivatives exchange, providing an online platform for trading futures and options in various commodities like bullion (gold, silver), energy (crude oil, gas), metals, and agricultural products.
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