Tata Steel extends gains after stock split, up 9%

New Delhi:

extended its gains on Friday as it rallied another 9 per cent after the stock of the country’s largest steel producer turned ex-split on the bourses.

Tata Steel had fixed July 29 as the record date to determine the eligibility of shareholders for the split of shares having a face value of Rs 10 each. However, the stock traded ex-split a day earlier, that is, Thursday, in the case of Tata Steel.

On Friday, shares of Tata Steel rallied about 9 per cent to Rs 109.30 before trading at Rs 108.40 by 11.35 am. The scrip had settled at Rs 100.35 on Thursday. The scrip has gained 14 per cent in the last two sessions.

The company had announced the stock split in a 1:10 ratio earlier this year and received the shareholders’ approval for the same on June 28, during its 115th annual general meeting (AGM).

Under a stock split, the listed company increases the number of shares that are outstanding by issuing more shares to the current shareholders. The split dilutes the face value of the particular share in the same ratio.

Investors who had the delivery of shares in their account as of June 28 were eligible for the equity dilution of the shares and the number of shares increased by 10 times, without changing the amount invested.

Tata Steel reported a consolidated net profit at Rs 7,765 crore for the quarter ended June, down 12.8 per cent over the year-ago period. Sequentially, net profit was down 20.4 per cent.

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