Bombay Dyeing has soared 8% to Rs 115 after stock turned ex-stock-split today.
The board of directors had fixed October 31, 2012 as record date for the purpose of sub division of the equity shares of the company having face value of Rs 10/- into 5 equity shares having face value of Rs 2/- each.
A stock split or stock divide increases the number of shares. The price is adjusted such that the before and after market capitalization of the company remains the same and dilution does not occur.
The primary motive for stock split is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.
The stock opened at Rs 106 and hit a low of Rs 104 on the BSE. As many as a combined 773,301 shares have already changed hands on the counter so far, against an average sub 360,000 shares that were traded daily in past two weeks prior to stock split.
