Sterling Tools surged as much as 15.94 per cent on Wednesday after the company informed bourses that its Board of Director will meet on November 5 to consider stock split of equity shares. At 1.50 pm, shares of Sterling Tools were trading 12.67 per cent up at Rs 991.65. The scrip opened the day at Rs 902 and had touched a high and low of Rs 1020.40 and Rs 902, respectively, in trade so far. Benchmark BSE Sensex was trading 29.44 points down at 28,021.44.
In a BSE filing, the company said, “A meeting of the Board of Directors of the Company will be held on November 05, 2016, to adopt the quarterly as well as half yearly unaudited financial results of the company for the quarter ended September 30, 2016 and to sub-divide the equity share of the company.”
Stock split is a division of a share into shares with lower face value. The division takes place in a way that the total market cap of the stock post-split remains the same. This in effect means that the total value of your holding on the day of the split does not change as the number of shares goes up. Stock split makes shares more affordable to retail investors.
In the past one year, shares of the company have surged 155 per cent to Rs 880.10 till October 16, whereas Sensex gained 2.51 per cent during the same period.