Salasar Techno Engineering Stock Split: Salasar Techno Engineering on April 30 will consider the proposal of a sub-division of existing equity shares having a face value of Rs 10 each. “A meeting of the board of directors of the Company will be held on April 30, 2022, to consider a proposal for sub-division of the equity shares of the Company having a face value of Rs 10 each, in such manner as may be determined by the board of directors, subject to regulatory/statutory approvals as may be required and the approval of the shareholders of the Company,” Salasar Techno Engineering Ltd said in an exchange filing.
What Is a Stock Split?
In a stock split, the company’s board of directors issues more shares of stock to its current shareholders without diluting the value of their stakes. A stock split increases the number of shares outstanding and lowers the individual value of each share. While the number of shares outstanding change, the overall market capitalization of the company and the value of each shareholder’s stake remains the same.
So, if you own one share of company XYZ and the company opts for a 2-for-1 stock split, the company would grant you an additional share, but each share would be valued at half the amount of the original. After the split, your two shares would be worth the same as the one share you started with.
The reason why a company opts for a stock split may have different reasons but one of the most common reasons is the increase in liquidity. An increase in liquidity makes way for more buyers and sellers to trade in their stocks. It may so happen that the shares of a company may be too high for many investors to buy and a further rise in price may discourage them from participating; to make the shares accessible for all, companies reduce the cost per share by splitting the stock.
It refers to splitting the face value of shares, in which the number of shares of the company increases but the m-cap stays the same. Existing shares split, but the underlying value remains unchanged. As the number of shares increases, the price per share goes down.
Salasar Techno Engineering Ltd has outperformed the market in the recent past with a wide margin. In the past one month, the stock has rallied 15 per cent as compared to a 1.38 per cent decline in the S&P BSE Sensex. Moreover, over the past one year, it has surged 19 per cent against 17.88 per cent rise in the benchmark index. It had hit a record high of Rs 370.75 on July 13, 2021.
Salasar Shares were trading higher on Wednesday morning. The stock ended at Rs 264 up by Rs 4.4 or 1.69 per cent from its previous closing of Rs 259.60 on the BSE on Tuesday.
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