HLL may go for 1-10 stock split

Earlier, Infosys had split its Rs 10 share into two shares of Rs 5 each. Wipro sub-divided its Rs 10 share into five shares of Rs two each. Zee Telefilms split its Rs 10 share into ten shares of Re one each. This follows the SEBI8217;s decision last year to remove the concept of Rs 10 face value.

The stock split is expected to boost the trading volumes for HLL followed by a better price discovery for the stock. HLL8217;s paid-up share capital stands at Rs 219.57 crore, comprising 21.95 crore equity shares of Rs 10 face value each. After the stock-split, while the paid-up capital will remain unchanged, the number of shares outstanding will increase to 219.57 crore of Re 1 face value each.

Furthermore, the stock split would reduce transaction costs and bring about a more effective price discovery mechanism. 8220;Besides, traders and investors who have pinned their hopes on HLL would stand to gain. The company has tremendous potential but the high market price was a dissuading factor for most investors keen on investing in the scrip. HLL was the leader in terms of market capitalisation till last month. Now newcomers like Wipro, Infosys and Zee Telefilms had overtaken HLL. After the stock split, HLL market cap is expected to bounce back again,8221; said a broker.