NEW DELHI: Shares of HDFC Bank - the countrys most valued private lender by market value- climbed over 1 per cent in morning trade on Tuesday as reports suggested that the board of the bank will consider a proposal to split the face value of its shares.The board of HDFC Bank will consider a proposal to split the face value of its shares on May 22, a move that will increase liquidity.
The bank intends to cut the face value of its stock from Rs 2 to Re 1 a piece.
Stock splits are generally done when the denomination of the share price rises.
A stock split helps the share price to come down, which could increase its popularity among retail investors.
Market participants perceive lower denomination of a stock as a cheaper one.
Shares of HDFC Bank rallied 17 per cent in the last one year to close at Rs 2328.40 on Monday.
This is the second time HDFC Bank is splitting the face value of its stock.
In July 2011, the private lender split its stock in the ratio of 1:5 one share of Rs 10 split into 5 shares of Rs 2 each.
HDFC Bank has an equity capital of Rs 545 crore with 220 crore fully paid shares.Shares of the company traded 1.04 per cent up at Rs 2,352.65 on BSE around 9:50 am.