Canara Bank jumps 5% post stock split; up 8% in last three sessions

Canara Bank stock split: Canara Bank has fixed May 15, 2024 as the record date for determining entitlement of equity shareholders for the purpose of sub division/ split of existing equity shares

Shares of state owned Canara Bank soared up to 5.4 per cent at Rs 119.40 a piece on the BSE in Wednesday’s intraday deals as  the stock of the state-owned lender turned ex-date for a split in the ratio of 1:5.

With today's gains, the stock has moved up more than 8 per cent in the last three trading sessions. 

Earlier this year on April 19, 2024 the public sector lender had set Wednesday, 15th May 2024 as the record date for determining entitlement of equity shareholders for the purpose of split of existing equity shares of the bank. The stock split arrangement was such that 1 equity share having face value of Rs 10 each, will be subdivided into 5 equity shares having face value of Rs 2 each.

A stock split makes the shares more affordable for retail investors, and the move is likely to increase trading activity on the counter. This could be particularly beneficial for smaller investors who may have been previously deterred by the higher share price.

Moreover, the stock split has the potential to broaden the bank's retail investor base as it makes the shares more affordable for retail investors and increase trading activity on the counter. This could be particularly beneficial for smaller investors who may have been previously deterred by the higher share price.

Moreover, the stock split has the potential to broaden the bank's retail investor base. As on March 31, 2024, domestic institutional investors held 14.38 per cent stake, while, foreign portfolio investors held 10.57 per cent holding. The resident individual shareholders, including notable investors like Rekha Rakesh Jhunjhunwala, held 10.65 per cent stake in Canara Bank, the shareholding pattern data shows.
 

Financially, Canara Bank recorded a 18.33 per cent year-on-year growth to Rs 3,757 crore in the January-March quarter of fiscal year 2023-24 (Q4FY24). The bank’s net interest income (NII), increased by 11.18 per cent to Rs 9,580 crore during the fourth quarter of FY24. The bank registered NII of Rs 8,617 crore in the same period of the previous year.

At 11:17 AM; the stock of the company was trading 4.55 per cent higher at Rs 118.40 per share. By comparison the S&P BSE Sensex was down mariginally by 0.04 per cent.

Meanwhile, last month, Fitch reaffirmed 'BBB-' ratings for Canara Bank with a stable outlook on the back of a resurgence in loan growth, particularly in farm and corporate sectors. However, the bank exercises caution in retail lending compared to peers, maintaining a balanced approach, which bodes well, it said.