Trident stock split 1:10

#1

Well, trident is a good company according to its fundamentals and giving good dividend each quarter non stop, i dont know much about the technicals of it,
why such a good company should split stocks from fv of 10 to 1, current trading price is 65, if its split then it may trade at around 6.5 Rs/share…
what may be the reason behind it,
becoz the company is very good at fundamentals and has many patents, rights and awards to their name,
what will be the future of this stock,
Multi Bagger or a Big Lagger.

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#2

Without any view on a particular scrip , it may be noted that splitting face value is prerogative of promoters/management . there has been cases where face value was splitted from 10 to 1 and when market price tumbled in bear phase or due to performance of company ,the face value of 1 was consolidated to again 10 rs .

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#3

Speaking of stock split I have a doubt. Imagine a stock having Face value as 10. If there is a stock split with face value 10 to 1, the new shares will have face value of 1.

What if they plan to split the shares further, will stock have face value in fractions or how does it work?

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#4

as per sebi rule minimum face value of share has to be rs 1 and there is no limit on maximum face value .

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#5

Yeah, what if the face value is 1 and they want to split, any idea what happens then to new FV

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#6

Just not allowed to split face value 1 .

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#7

I see, that means many stocks like HDFCBANK will not be allowed for further splits.

#8

stock split is only positive for promotors and management and not for the retail investors ah

#9

Unless of course they plan for bonus

#10

Obviously after the proposed split of present face value 2 there can never be another split . i am not using the words like from present face value 2 to 1 because it can only be splitted in face value 1 as splitting in paisa too not allowed.

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#11

BONUS is all together a different thing with face value remain same, reserves reduced and increases the burden of serviceable equity for company .

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#12

I mean what if promoters wants to decrease share price to make it affordable to retail if the FV is Already 1, in such case bonus can be only option

#13

well @sabkaview i am mainly concerned about the stock,
after split the stock may fall down or will it be good for stock,
whats the main reason and why companies split their stock even though there is no change in market capitalization. and no use for the company.even after the stock split.

#14

As i said it is prerogative of management to split the face value or issue bonus shares . well i do not agree with the view that management should consider bonus to make it affordable for small investor that too in this era where Marketable lot is 1 share .
split is an option because it neither increases the equity nor reduces the reserves and remain in continues trade not like bonus where it needs listing approval . Frankly speaking i do not understand any worthwhile reason why companies like Trident at market price of rs 65 per share need face value split .

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#15

thanks @sabkaview
if company gives bonus then their market capitalization will change ah.
what u think about hdfc bank split 1:2

#16

Neither bonus nor stock split changes M-Cap, it always remains same

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#17

well @dheeraj Actually i just want to know how companies move from small capital to medium capital or large capitalization, or vice versa

#18

@VigeVet As you are aware Market Cap= Share price * Number of shares

Larger cap comprises of 85% of total Indian stock market, Mid-caps the next 15% and the last 5% with smallest MCap forms the small cap (not sure on theses ratios but you get the point)

Suppose there is a mid-cap company with 100 crores shares outstanding having share price 100. Now due to exceptional performance in earnings the share price rises to 1000 within some years making it a multibagger.

Now initially when it was in the mid cap the firm used to be in the mid 15%. now that the share price increased thereby increasing Mcap, the firm moved to the 85 % section comprising of companies with highest mcaps making it a large cap.

I never heard if there is any threshold number to distinguish the 3 section, but hope you understood the point.

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#19

yes, thank u, then if there is split and bonus shares given by the company,
then company share increases,
ie) if 1:2 bonus or split, at share price 10 and company have 10 shares, after split it turns to 5 each and company have 20 shares at 5 Rs, then if the share price from 5 moves to 8 Rs, and company having 20 shares at 8 Rs,
before it was 100 Rs total and now it is 160 Rs in total, it means company capitalization increases from 100 Rs to 160 Rs.
am i right.

#20

Exactly

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