Shalimar Paints has surged 20% to Rs 154 after the stock turned ex-stock split today. The company has sub-divided the equity share of face value Rs 10 each into 5 equity shares of face value Rs 2 each in order to boost the liquidity of shares.
The stock opened at Rs 130 and hit a low of Rs 125 on the Bombay Stock Exchange. As many as a combined 452,054 shares have already changed hands on the counter so far against an average less than 15,000 shares that were traded daily in past two weeks before stock split.
“The board of directors of the company has fixed a record date of November 23, 2012 for the purpose of stock split of existing equity share of Rs 10 into 5 equity shares of Rs 2/- each,” Shalimar Paints said in a filing.
According to market experts, the primary reason for a stock spit is to increase the liquidity of the shares in stock the market. More liquidity makes the buying and selling of the shares easier for the investors.
