Tata Investment Corp. will be on the market radar on Monday as it marks the last session for investors to buy shares to qualify for the stock split ahead of the record date.
The company has announced a 1:10 stock split. That means, one existing fully-paid up equity share of face value Rs 10 each will be sub-divided into 10 equity shares having face value of Rs 1 each, as per the board's plan.
The company has fixed Tuesday, Oct. 14, as the record date for the purpose of determining the equity shareholders eligible for the stock split.
Only those investors who hold Tata Investment Corp shares in their demat account as of this record date will be eligible for the bonus allotment.
Under India's T+1 settlement cycle, investors must buy the shares at least one trading day before the record date to be eligible. This means that purchases made on the record date itself will not reflect in the demat account in time.
On Tuesday, Tata Investment shares will also trade ex-date. That means the share price will adjust to the stock split.
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.
Shares of Tata Investment settled 3% higher at Rs 9,295 apiece on the NSE on Friday, compared to a 0.4% advance in the benchmark Nifty. The stock has risen 32% in the last 12 months and 36% on a year-to-date basis.
Tata Sons, together with other Tata companies, holds 73.38% of the paid-up equity capital of Tata Investment Corp, a non-banking financial company.
The company's activities comprises primarily of investing in long term investments in equity shares, debt instruments, listed and unlisted, and equity related securities of Tata Group companies in a wide range of industries. The major sources of income of the company consist of dividend, interest and profit on sale of investments.
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