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The board of directors of HDFC Bank, on Wednesday, approved a proposal to split the lender’s share from one equity share of face value of ₹2 each to two shares of face value ₹1 each.
“Owing to the bank’s strong financial performance and sound asset quality, the market price of the bank’s equity shares has grown steadily over the past several years,” HDFC Bank said in a regulatory filing, adding that the stock split will augment the affordability of the bank’s equity shares and participation of retail and individual investors.
“This will thereby facilitate more liquidity in the bank’s equity shares, sub-division of the equity shares is proposed,” it said.
AGM on June 12
The proposal will now be approved by the bank’s shareholders in the annual general meeting (AGM) on June 12, and the stock split will be completed three to four months after that. After the sub-division, the lender’s authorised share capital will be ₹650 crore divided into 650 crore fully paid-up equity shares of ₹1 each from the current 325 crore equity shares of ₹2 each.
HDFC Bank, the country’s largest private sector lender, had last split its shares in 2011 in a ratio of 1:5, or one share of ₹10 split into five shares of ₹2 each.
The AGM will also decide on the proposed dividend ₹15 per equity share recommended by the board at its earlier meeting on April 20.
The lender’s scrip remained largely flat and closed at ₹2,405.10 apiece on the BSE.
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