Prior to the stock split, the Eicher Motors share price exceeded Rs 20,000 on the BSE.
Eicher Motors surged around 3 per cent to an intra-day high of Rs 2,249 on the BSE a day after the 10-to-1 stock split came into effect. At 10:42 am, the shares of Eicher Motors had come off their highs and were trading at Rs 2,190, up Rs 13 or 0.6 per cent, on the BSE.
The shares had soared more than 10 per cent in intra-day trading on Monday, but gave up most of their gains to end marginally higher by 0.23 per cent.
In June, the company’s board had approved stock split in the ratio 1:10, which means that the shares of the company would be divided from one existing equity share with face value of Rs 10 each into ten equity shares of face value of Rs 1 each.
Prior to the stock split, the Eicher Motors share price exceeded Rs 20,000, making it one of the most high-valued stocks in absolute terms and placing it in the company of shares such as MRF (currently trading at Rs 59,865).
Companies split shares to reduce the denomination of a stock, thereby making it more affordable for small retail investors and boosting liquidity. And share prices generally rally after stock split as new investors flock to take advantage of the new prices and heightened liquidity.
The BSE Sensex was trading at 38,729.50, lower by 67.85 points or 0.17 per cent and the NSE Nifty was at 11,443.25, down 22.55 points or 0.21 per cent at the time.
