Tata Steel up 2% in a weak market on stock split plan; zooms 13% in 3 mths

Shares of Tata Steel were up 2 per cent at Rs 1,349.80 on the BSE in Monday's intra-day trade, in an otherwise weak market, after the company said the board will meet on May 3, 2022 to consider stock split proposal.

At 09:50 am, the stock was up 1.9 per cent at Rs 1,343.80 as compared to 1.8 per cent decline in the S&P BSE Sensex.

"A meeting of the board of directors of the Company will be held on May 03, 2022, to consider a proposal for sub-division of the equity shares of the Company having a face value of Rs 10 each, in such manner as may be determined by the board of directors, subject to regulatory/statutory approvals as may be required and the approval of the shareholders of the Company," Tata Steel said in an exchange filing.

The company's board will also to consider and take on record the audited financial statements and results for the quarter and the financial year ended March 31, 2022 and recommend dividend, if any.

A stock split is generally undertaken to make the stock more affordable to small retail investors and increase liquidity. It refers to splitting the face value of shares, in which the number of shares of the company increases but the m-cap stays the same. Existing shares split, but the underlying value remains unchanged. As the number of shares increases, the price per share goes down.

Tata Steel has outperformed the market in the recent past with wide margin. In the past three months, the stock has rallied 13 per cent as compared to a 5.7 per cent decline in the S&P BSE Sensex. Moreover, over the past one year, it has surged 51 per cent as against 17 per cent rise in the benchmark index. It had hit a record high of Rs 1,535 on August 16, 2021.