HDFC Bank to consider stock split, new face value to be Rs 1


Mumbai: The board of HDFC BankNSE 0.37 % – country’s most valued private lender by market value – will consider a proposal to split the face value of its shares on May 22, a move that will increase liquidity. The bank intends to cut the face value of its stock from Rs 2 to Rs 1 a piece.

Stock splits are generally done when the denomination of the share price rises. A stock split helps the share price to come down, which could increase its popularity among retail investors. Market participants perceive lower denomination of a stock as a cheaper one. Shares of HDFC Bank rallied 17 per cent in the last one year to close at Rs 2328.40 on Monday.

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This is the second time HDFC Bank is splitting the face value of its stock. In July 2011, the private lender split its stock in the ratio of 1:5 – one share of Rs 10 split into 5 shares of Rs 2 each. HDFC Bank has an equity capital of Rs 545 crore with 220 crore fully paid shares.

The bank also said in a regulatory filing that trading window for dealing in shares of the bank will be closed for designated persons from May 7 to May 24.