Transformers and Rectifiers India Ltd goes ex-split in the ratio 10:1 on 28 Sep 2017. How does this affect my equity holdings?
TRIL Ltd goes ex-split in the ratio 10:1 on 28 Sep 2017, that is, 10 split shares are issued for every one share held in the Demat account of all eligible shareholders.
Effect on Holdings:
When a stock is split, the share price reduces, in this case by a factor of 10. So if you held TRIL shares at an average price of Rs.300, the price of each share after the 10:1 split will be 300/10 = Rs.30. Your share price gets divided by 10.
Please note that when a stock splits, it’s face value reduces. Here, TRIL face value reduces from 10 to 1 and the number of shares increases 10 times. But since the price of each stock reduces by 10 times, your investment value in TRIL remains the same.
P&L of holdings:
Your P&L for TRIL holdings will show an artificial drop of about 90% on the ex-date of 28 Sep and the record date of 29 Sep. The split shares will be credited to your Demat at the end of the Record date of 29 Sep and it will be visible in your Kite holdings from 3 Oct which is a Tuesday.(Since 30 Sep and 1 Oct is the weekend, 2 Oct is a national holiday).
You will receive an SMS from CDSL at the end of the Record date when your split shares are credited to your Demat.