Before Diwali, Shriram Finance Limited, a non-banking finance company (NBFC), announced two important corporate actions: a stock split
and a dividend distribution for its investors. However, the company’s shares experienced a significant drop on Friday.
What is a Stock Split?
During a board meeting on October 25, Shriram Finance revealed that it would split one share with a face value of ₹10 into five shares, each worth ₹2.
The record date for this stock split has not yet been announced. It’s worth noting that Shriram Finance has never conducted a stock split or issued bonus shares since it was listed.
Purpose of the Stock Split
Companies often split their stock to increase the number of shares available and improve trading liquidity.
By making shares more affordable, they attract more retail investors. A stock split reduces the share price, making it easier for more people to invest.
Dividend Declaration
Shriram Finance declared an interim dividend of ₹22 per equity share for the financial year 2024-25.
The record date for this dividend is set for November 7, 2024, and eligible shareholders will receive their payments by November 24, 2024.
Quarterly Results Overview
In addition to these announcements, Shriram Finance reported its second-quarter results.
The company saw an 18.3% increase in profit after tax (PAT), reaching ₹2,071.26 crore compared to ₹1,750.84 crore during the same period last year.
The net interest income (NII) for the September quarter also rose by 16.37%, totaling ₹5,606.74 crore, up from ₹4,818.18 crore a year ago.
Stock Performance Update
Despite these positive developments, shares of Shriram Finance Ltd closed down 3.92% at ₹3,118 on Friday. However, the stock has gained 52% so far in 2024 and over 70% in the past year.
