The stock split adjustment of shares will only be available to those who possessed Kotak Mahindra Bank shares in their demat account by the end of Tuesday’s trading session. On Wednesday, January 14, Kotak Mahindra Bank Ltd. shares dropped as the institution started trading adjusted for its previously announced stock split.
Why Kotak Mahindra Bank Shares Fell After the 1:5 Stock Split
One ₹5 share has been split into five ₹1 shares by Kotak Mahindra Bank. January 14 was set as the record date for the stock split. This implies that the stock split will be available to shareholders who possessed Kotak Mahindra Bank shares in their demat accounts as of Tuesday’s closure. Those who purchase bank shares now will do so after the adjustment.
For example, as of Tuesday’s close, if an investor had 100 shares of Kotak Bank of face value of ₹5 each, the stock split will mean those 100 shares get converted to 500 shares (1:5 ratio) of face value of ₹1 each. The value of those shares will remain the same as the stock price adjusts in proportion to the split ratio.
After splitting a share of ₹10 into two shares of ₹5 each in 2010, Kotak Mahindra Bank has now split stock for its stockholders twice. The lender additionally issued bonus shares in a 1:1 ratio later in 2015, which meant that owners at the time received one free share for each share held as of the record date.
On Saturday, January 24, Kotak Mahindra Bank will release the results of its third quarter. In addition to its findings, a proposal to raise money through non-convertible debentures (NCDs) will be taken into consideration by the lender.
Kotak Mahindra Bank shares are down 0.6% at ₹424.1 on Wednesday. In the past month, the stock has increased by 22%.
FAQs: Kotak Mahindra Bank Stock Split Explained
1. Why did Kotak Mahindra Bank shares fall on January 14?
Kotak Mahindra Bank shares fell as the stock began trading adjusted for the 1:5 stock split, which led to a proportional reduction in the share price.
2. What is Kotak Mahindra Bank’s stock split ratio?
The bank announced a 1:5 stock split, meaning one share with a face value of ₹5 was split into five shares of ₹1 each.
3. What was the record date for the Kotak Mahindra Bank stock split?
The record date was January 14, making shareholders holding the stock by the end of Tuesday’s trading session eligible for the split.
4. Who is eligible for the Kotak Mahindra Bank stock split?
Only investors who held Kotak Mahindra Bank shares in their demat accounts by Tuesday’s market close are eligible.
5. What happens if investors buy Kotak Mahindra Bank shares after the record date?
Investors purchasing shares after the record date will buy post-split adjusted shares and will not receive additional shares from the split.
6. How does the 1:5 stock split affect existing shareholders?
The number of shares increases fivefold, while the overall investment value remains unchanged.
7. Can you explain the stock split with an example?
If an investor held 100 shares of ₹5 face value, after the split, they would hold 500 shares of ₹1 face value, with the total value remaining the same.
8. Does a stock split change the market capitalization of the bank?
No, a stock split does not affect market capitalization; it only improves liquidity by increasing the number of shares.
9. Has Kotak Mahindra Bank split its stock before?
Yes, the bank earlier carried out a 1:2 stock split in 2010.
10. Has Kotak Mahindra Bank issued bonus shares in the past?
Yes, the bank issued bonus shares in a 1:1 ratio in 2015.
11. When will Kotak Mahindra Bank announce its Q3 results?
The bank is scheduled to announce its Q3 financial results on January 24.
12. What other corporate actions are planned by Kotak Mahindra Bank?
Along with its results, the bank will consider a proposal to raise funds through non-convertible debentures (NCDs).
13. How did Kotak Mahindra Bank shares perform on January 14?
The shares were down 0.6%, trading at around ₹424.1.
14. How has Kotak Mahindra Bank stock performed recently?
Over the past month, the stock has gained approximately 22%.
15. Does a falling share price after a split mean a loss for investors?
No, the price fall is a technical adjustment due to the stock split, not an actual loss in value.
