- Kotak Mahindra Bank announced a 1:5 stock split to increase share affordability and liquidity
- The stock split will complete within two months after regulatory and member approvals
- Kotak Mahindra Bank has previously split shares five times since 2000
Kotak Mahindra Bank Ltd. on Friday announced a stock split of 1:5 ratio. This means that one share will be split into five equity shares.
The company added that the stock split will tentatively be completed within two months from receipt of all the regulatory approvals and the members' approval, Kotak Mahindra Bank said in an exchange filing on Friday.
Explaining the rational for the stock split, the bank said it was to make the Bank's equity shares more affordable and enhance their liquidity.
In the past, the bank has split its shares at least five times in the years 2000, 2004, 2005, 2010, and 2015.
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.
This implies that while the value of stocks that a shareholder has does not change, the number of shares they hold will increase. Record date for the share split is yet to be ascertained.
This comes as Kotak Mahindra marks 40 years today. Uday Kotak, Founder and Director, Kotak Mahindra Bank, in a post on X also reflected on the company's journey from its origins in 1985.
Kotak Mahindra Bank Share Price Today
The stock settled 0.52% lower at Rs 2,087.80 apiece on the NSE, compared to a 0.47% decline in the benchmark Nifty 50. The shares earlier during the day fell as much as 0.96% to Rs 2,078.50 per share.
Kotak Mahindra Bank shares have risen 20.19% in the last 12 months and 16.89% year-to-date.
Out of 43 analysts tracking the company, 29 maintain a 'buy' rating, 10 recommend a 'hold' and four suggests 'sell', according to Bloomberg data. The average 12-month consensus price target of Rs 2391.65 implies an upside of 14.7%.
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