Of the 38 companies that split their stocks so far this year, 26 have risen
Stock splits have been particularly popular with companies with small market capitalisation, probably because they are keen to attract investor interest. Of the 72 companies that announced a split, 55 had market capitalisation of less than ₹2,000 crore. Most of the 100 per cent gainers are from this space, too.
In total, seven large-cap companies have announced stock splits this year. Most are yet to announce the record date for the split. Of these, six are banking stocks: SBI, ICICI Bank, Axis Bank, Bank of Baroda, Punjab National Bank and Canara Bank.
But not all stock splits are driven by such rationale. Because much of the stock split excitement has been in small-cap stocks, investors need to be wary, and consider the fundamentals of the company before investing, warn experts.