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Shriram Finance Ltd., a prominent non-banking financial company (NBFC), has made a significant announcement concerning its stock and dividend policy. The company's board of directors, at their meeting on Friday, October 25, decided to execute a 1:5 stock split. This means that for every one share currently held with a face value of ₹10, shareholders will receive five new shares with a face value of ₹2 each. The effective date for this stock split will be communicated in due course, pending approval from the company's members. Notably, this marks the first instance of a stock split or bonus share issuance by Shriram Finance since its listing.
The rationale behind the stock split is primarily to increase the company's outstanding shares in circulation, thereby enhancing liquidity and making the stock more accessible and affordable to a wider pool of investors. By reducing the price of each share, the company aims to attract a larger shareholder base and encourage active participation in the market. This move could potentially boost trading activity and generate greater interest in Shriram Finance's stock.
In conjunction with the stock split, Shriram Finance also declared an interim dividend of ₹22 per equity share for the current financial year 2024-25. The record date for this dividend payout has been set as November 7, 2024, with the distribution scheduled for November 24, 2024. This dividend announcement serves as a gesture of appreciation for the company's shareholders and represents a portion of the profits generated by Shriram Finance during the period.
The company's decision to undertake both a stock split and declare a dividend reflects its confidence in its current financial performance and future prospects. It also signifies a commitment to rewarding its shareholders and promoting investor confidence. The market reaction to these announcements will be closely observed, as investors assess the implications for the company's future growth and valuation.
Source: Shriram Finance announces 1:5 stock split, declares dividend of ₹22 per share