Shilpa Medicare rallies on stock split plans

The stock has surged by 61% thus far in 2015, compared to a sub-3% rise in the CNX Nifty.

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Shares of Shilpa Medicare have rallied 8% to Rs 1,148 on the National Stock Exchange (NSE) after the pharmaceutical company scheduled a board meeting on August 12, 2015 to consider a stock split proposal.

“The board of directors of the company will consider the sub-division of nominal value equity shares of Rs 2 each to Rs 1 each on August 12, 2015,” Shipla Medicare said in a filing.

Stock split or sub-division of equity shares is meant to infuse liquidity and make shares affordable for retail investors who could not invest earlier due to the high stock price.

A share split itself does not increase the economic value of a company, but it can increase the shareholder base — making it easier for both retail and institutional investors to buy stocks.

The stock opened at Rs 1,070 and touched a high of Rs 1,180 on the NSE. A combined 46,729 shares changed hands on the counter on the BSE and NSE.

The stock has surged by 61% from Rs 712 thus far in 2015 compared to a sub-3% rise in the CNX Nifty.