After the stock went ex-split on Thursday, Indian Railway Catering and Tourism Corporation (IRCTC) stock jumped 16 percent. The company has designated October 29 as the record day for the 1:5 stock split.
On August 12, the IRCTC board of directors approved a stock split.
This means that each share of stock will be divided into five. This boosts the stock's liquidity by lowering its stock price, making it more accessible to investors.
What is a stock split?
A stock split raises a company's number of shares; in this scenario, the total number of shares will increase fivefold, but the share price would decrease. The primary goal of a stock split is to lower the cost of holding for shareholders.
It usually happens following a significant price increase in a stock.
Even after a significant decrease from its record high of $6,369 on October 19, 2021, IRCTC shares were trading around $4000 before the stock split. IRCTC's stock price was extremely expensive for small investors before the split, but following the split, the share price dropped to approximately 900, making it more appealing to investors.
Have a look at how netizens took to Twitter to share predictions and even memes. Some of the users even seem confused as to what was happening.