Indian Railway Catering and Tourism Corporation (IRCTC) shares surged more than 7 per cent in a strong market on the news that the board will meet on August 12 to consider splitting shares of the company. “The board of Indian Railway Catering and Tourism Corporation will meet on August 12 to recommend the proposal for sub-division of company’s equity shares of face value of Rs 10 each and matters related thereto,” IRCTC said in a regulatory filing to the stock exchanges over the weekend. At 12:35 pm, IRCTC shares were trading at Rs 2,493.40, up Rs 163.80 or 7 per cent, on the BSE.
When a company opts for a stock-split, there is an increase in its outstanding shares and a decline in price in the same ratio. For example, if the shares are split in the ratio of 2:1, an investor would get 2 shares for every share held by him / her and the market price of the shares will halve accordingly. Companies usually split shares to keep the share prices affordable for investors and ensure greater liquidity in the markets.
The decision on the stock split will be subject to the approval of the Ministry of Railways and the shareholders.
The board of IRCTC will consider and approve the unaudited financial results of the company for the quarter ended June 30, 2021.
The BSE Sensex was trading at 52,927.50, higher by 339.65 points or 0.65 per cent and the NSE was at 15,876.60, up 113.50 points or 0.73 per cent at the time.