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Why Sub Division/Splitting of shares is Made?

Secondary Mkt 1324 views 6 replies
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CS
987 Points Posted on 30 June 2011

Can anyone tell why sub division is made and what its impact on share capital & prices of shares ???????????

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On 30 June 2011 at 16:03 Report
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Manager Accounts (CA. Final)
694 Points Posted on 30 June 2011
To increase the interest of samll investor & daily trading volume of share.
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On 30 June 2011 at 16:49
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CS
987 Points Posted on 30 June 2011

how increase the interest of small shareholder

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On 30 June 2011 at 17:20
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Manager Accounts (CA. Final)
694 Points Posted on 30 June 2011
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.
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On 30 June 2011 at 17:49
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Manager Accounts (CA. Final)
694 Points Posted on 30 June 2011
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.
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On 30 June 2011 at 17:54
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CS
987 Points Posted on 01 July 2011

Thanks Vikash.

It means after splitting mkt price also divide into proportion of splitting.

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On 01 July 2011 at 10:36
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Manager Accounts (CA. Final)
694 Points Posted on 01 July 2011
Yes, after splitting mkt price of share also divide into proportion of splitting.
1 Reply
On 01 July 2011 at 10:41


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