Defence PSU Bharat Electronics today said it will split its shares in the ratio of 1:10, which will make the scrip more affordable to investors and increase market liquidity.
With share price of Rs 1,540.35 apiece, BEL’s market capitalisation stands at Rs 34,405 crore.
In a filing to BSE, BEL said its board has approved sub-division of existing one equity share of Rs 10 each into 10 number of equity shares of Re 1 each.
As per the capital restructuring guidelines of the Department of Investment and Public Asset Management (DIPAM), a CPSE has to go in for a share split when its market price or book value exceeds 50 times of its face value.
The guidelines state that the government wants to encourage participation of small investors in capital market so as to increase the depth of the market, liquidity and trading volume of the shares. However, high share prices sometimes acts as a deterrent for the investors.BEL further said that the company would seek shareholders’ nod for sub-division of the equity shares. The company has also declared interim dividend of Rs 3 per equity share for the financial year 2016-17.