Tata Steel shares surge as stock trades ex-split today. What investors should know

 While announcing its Q4FY22 results, Tata Steel's board approved a proposal to stock split in 1:10 ratio

Shares of Tata Steel started trading ex split in Thursday's deals, a day ahead of its record date for the stock split it had announced in the ratio of 1:10, which has been fixed on Friday, July 29, 2022 for the purpose of determining the eligibility ofshareholders for the purpose of sub-division of its equity shares or stock split. The stock surged over 3% to ₹99 apiece on the BSE  in opening deals. 

Explaining the rationale behind the stock split decision, Tata Steel said that it is done to enhance the liquidity in the capital market, to widen shareholder base and to make the shares more affordable to small investors.

 A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. Stock split decreases the market price of the individual shares, however, does not result in changing the market capitalization  of the company.

 Earlier this week, the domestic steel major Tata Steel posted a 21% fall in its consolidated net profit to ₹7,714 crore for the April-June quarter due to higher costs of materials and finance costs as compared to ₹9,768 crore in the year-ago quarter.

Its total income rose to ₹63,698 crore in the April-June 2022 period against ₹53,627.6 crore year-on-year (YoY). Its expenses, which included the cost of materials consumed and the finance cost, increased to ₹51,912 crore as against ₹41,490.8 crore in same quarter last year.

Tata Steel CEO and MD T V Narendran said April-June has been a challenging quarter for the global and Indian economy with rising  interest rates, supply chain constraints and slowdown in China due to COVID-19.]

Tata Steel is among the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum. It is one of the world's most geographically diversified steel producers, with operations and commercial presence across the world

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