Can anyone tell why sub division is made and what its impact on share capital & prices of shares ???????????
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Why Sub Division/Splitting of shares is Made?
Replies (6)
To increase the interest of samll investor & daily trading volume of share.
how increase the interest of small shareholder
Example: Currently market price of 1 of share of OMDC (Orissa Minerals, FV-Rs.10) is Rs.60,000/-, we need Rs.60,000/- to buy one share of OMDC. if it split share of fv of rs.10 to fv of rs.1 each than we need Rs.6,000/- (Rs.60000/10) to buy one share, which a small investor can afford.
HDFC bank is going to split its share from fv of Rs.10 to Rs.2 each. Current Market price is Rs.2500/- each. On record date one share will converted into FV of Rs.2 each and Market price will 1/5 of record date.
Thanks Vikash.
It means after splitting mkt price also divide into proportion of splitting.
Yes, after splitting mkt price of share also divide into proportion of splitting.
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