The HDFC Bank had last split its shares in 2011 in a ratio of 1:5, or one share of Rs 10 split into five shares of Rs 2 each.
HDFC Bank shares fell on Thursday following the stock split of the country's largest private sector lender. The bank's share was split into two with a face value of Rs 2 each.
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A stock split is when a company divides its existing shares into multiple shares to boost the liquidity of the shares. The reason firms opt for a stock split is to lower the trading price of their stock so that it can come in a range which is comfortable for investors and thereby, increase the liquidity of the shares.
HDFC Bank had last split its shares in 2011 in a ratio of 1:5, or one share of Rs 10 split into five shares of Rs 2 each.
India’s top two private sector banks, HDFC Bank and ICICI Bank, have bucked the broader bearish trend in equity markets but are trading under pressure from the last few days.
Shares of HDFC Bank quoted at Rs 1086.90, lower by 0.64 percent, on the NSE Nifty50 at 12.42 pm. The stock has been on a losing streak from the last 5 days, shedding 4.5 percent during the period.
Meanwhile, the second-largest lender in India, ICICI Bank shares declined as much as 3 percent and were headed for a fourth straight session of losses. The stock quoted at Rs 390.05, down 2.33 percent.
So far this year, HDFC Bank has returned just 2.41 percent to investors amid broader investor outflows. Compared to HDFC Bank, ICICI Bank has been an outperformer with the stock giving 8 percent returns to its investors year-to-date.
The one-year return on ICICI Bank is over 21.5 percent, beating HDFC Bank’s almost 11 percent returns. On a 10-year-basis, HDFC Bank beats ICICI Bank hands down with the former rising 612 percent during the period against the latter’s 155 percent.
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First Published: IST