Tiger Logistics (India) Ltd, a prominent player in the logistics sector, has announced a significant corporate action with the declaration of a stock split in the ratio of 1:10. This strategic move aims to enhance the liquidity of the company’s shares and potentially attract a broader investor base. As a result of this split, the nominal value of each equity share will reduce from ₹10 to ₹1.
The process of stock split entails a meticulous procedure, including determining the record date to ascertain the eligibility of shareholders for the split. In this case, the record date has been set as March 4, 2024. This critical date serves as a benchmark to identify shareholders who will benefit from the stock split, aligning with regulatory requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The decision to implement the stock split stems from the shareholders’ approval obtained through a postal ballot on February 10, 2024. Following this mandate, the Board of Directors of Tiger Logistics (India) Ltd formalized the record date to execute the subdivision or split of equity shares. Each existing equity share with a face value of ₹10 will now be subdivided into 10 equity shares, each with a face value of ₹1.
This transformative measure signifies the company’s commitment to enhancing shareholder value and fostering wider participation in the stock market. By reducing the nominal value per share, Tiger Logistics (India) Ltd aims to make its shares more accessible to a broader spectrum of investors, potentially boosting trading activity and market liquidity.
In line with the implementation timeline, shares of Tiger Logistics (India) Ltd will trade ex-split on Monday, marking a significant milestone in the company’s journey. This development comes amidst the backdrop of the company’s recent performance on the Bombay Stock Exchange (BSE), where its shares closed at ₹690.40, reflecting a decline of 9.68% on Saturday, March 2.
Understanding the Concept of Stock Split: A stock split, also known as a subdivision of shares, represents a corporate action undertaken by a listed company to increase the number of its shares outstanding. This strategic manoeuvre aims to enhance the liquidity of the stock while maintaining the overall market capitalization of the company.
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During a stock split, the number of shares outstanding increases by a specific multiple, while the total currency value of all shares remains unchanged. For instance, in a scenario where a company declares a stock split in the ratio of 1:2, each shareholder will receive two shares for every share held before the split. Consequently, the price per share is adjusted accordingly to reflect the increased number of shares.
Companies typically opt for a stock split to intentionally lower the price of their stock, thereby making it more affordable for a wider range of investors. By reducing the nominal value per share, the company aims to enhance trading liquidity and promote investor participation without diluting the intrinsic value of the shares.
