Stocks in News: What Tata Steel stock split means for investors? How will it impact price movement?

Stocks in News – Tata Steel shares ended with strength on the BSE on Monday, despite a lackluster show by the BSE Sensex and Nifty50. Tata Steel stock settled at Rs 1,339.20 and was up by Rs 20 or 1.5 per cent. The momentum was on the back of an announcement of stock split by this geographically diversified steel company.  

The Board of Directors will consider a proposal for sub-division of the equity shares of the company having a face value of Rs 10 per share on May 3, the company informed in its filing to exchanges.

What this means for the retail investors?

Technical Analyst Nilesh Jain sees this as a gain for retail investors arguing that a sub-division of this stock could enable higher participation. Meanwhile, it does not mean any significant impact on the charts, says the analyst.

Jain is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking.

Another analyst Vikas Sethi of Sethi Finmart said on Monday that decision to split stock may provide an impetus to the valuations of the company and could enhance liquidity in the stock. ,

He, however, does not see any material impact on the balance sheet of the company as a result of stock split.

Also Read: Tata Steel stock split may make counter attractive, provide impetus to liquidity: Expert Vikas Sethi

The Centrum Broking analyst said that his view on the stock is a buy for positional or long term period and not for near to immediate term period.

He said that the overall metal sector including this stock has been seeing a sideways movement. No major price action is being seen in this stock, the AVP added.

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The stock attained a 52-week high of Rs 1534.60 on the BSE and since then it has corrected and is now looking attractive as a long term and positional term bet. The risk-to-reward ratio seems favourable now, he further said.

Buying is recommended in the range between Rs 1300-1320. He puts the target price at Rs 1400-1450 with a stop loss of Rs 1250.  

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)