The pioneers of Indian banking and financial service HDFC Bank plans to consider stock split in the ratio 1:2. The company said “Board of Directors of the Bank would inter‐alia consider a proposal for sub‐division of Bank’s equity shares from 1 (one) equity share of face value of Rs. 2/‐ each to 2 (two) equity shares of face value of Rs. 1/‐ each, at their meeting to be held on May 22, 2019.”
Notable, in July 2011, the bank had a split ratio of 5:1, or one share of Rs. 10 split into five shares of Rs. 2 each. The basic purpose of stock split is to decrease the share price when the price of the share is too high but the market capitalization does not change. Moreover, it encourages market players to participate more on that script. According to BSE, HDFC Bank has the highest market valuation among banks at RS. 6,36,910.94 crore.
At present, the bank has issued about 272.33 crore shares of the face value of Rs. 2.
On Monday, the stock was closed 1.7% lower at Rs 2,328. Currently, it is trading at Rs.2340, up 0.50%.
Highlights of HDFCBANK Q4FY19: The bank had posted an increase in PAT by 5.36% QoQ while on a YoY basis, there is a sharp rise of 22.63%. Bank's provisions and contingencies were flat at 0.60% QoQ and 22.73% in YoY that might be a concern for the investors. Gross NPA% is 1.36% QoQ but 1.3% fall in YoY basis that will find the attention of the investors to stay long in the script.