Private sector lender HDFC Bank on Monday announced a stock split in the 1:5 ratio aimed at attracting more retail investors into its owner base.
"As share prices get higher in absolute terms, a retail investor finds it too high ... this (stock split) will make it more appealing to retail investors," HDFC Bank executive director Paresh Sukhtankar told reporters on a conference call on Monday.
The bank's scrip closed 1.89% lower at Rs 2,315.70 at the Bombay Stock Exchange on Monday.
The number of retail investors in the bank's total shareholders has come down to around 10% over the past several years.
The Board of Directors of the bank, which met on Monday to discuss the bank's performance in the just concluded financial year, took a decision to split every share of the bank into five. Under the new scheme, the face value of every share will come down to Rs 2 from Rs 10.
The record date for the same will be determined shortly and the split will have to be approved by the bank's shareholders and get other statutory go-aheads.
Meanwhile, in another good news for investors, the bank today announced a dividend of Rs 16.50 per share versus the Rs 12 per share it had distributed in 2010.