Monday, October 18, 2021

IRCTC | STOCK SPLIT | What to do before and After the Stock Split ?


Since August, the market price of IRCTC has more than doubled  after the company on July 30, 2021, announced a stock split plan. On August 12, 2021, the board of IRCTC approved a stock split in the ratio of 1:5 to enhance the liquidity in the capital market, widen the shareholder base and make the shares affordable to small investors.

IRCTC has fixed October 29, 2021, as the record date to ascertain the name of shareholders entitled for subdivision/split of equity shares of Rs 10 each into five (5) equity shares of the face value of Rs 2 each. The scrip will turn ex-date for stock split on October 28, 2021.

What to do Before and After the Stock Split

Recent rally in IRCTC  stock was expected as when a company announces stock split then generally these type of rally is expected and seen in the stock .

Now there are 2 conditions:-

1) If you are a trader or short term investor then you should book profit and exit from the stock before the ex-date i.e 28 Oct 21. As it is generally seen that after the stock split , stock enters into a short term correction and consolidation phase and will test your patience and may create frustration to short term trader. 

So it will be better to exit before ex-date. You can again enter into it after that consolidation phase is over after a fresh breakout in the stock.

2) If you are a long term investor  then there is no need to worry and hold firmly the stock again for a multibagger return. Because , company has monopoly in the related sector . Long term is still intact so there is no need to worry in routine correction . Hold firmly and follow buy on dips for long term perspective .

Disclaimer- The information on this blog are based on my personal opinion and experience, it should not be considered professional financial investment advice and in no way it should be considered as a tip. We does not take any compensation of any kind whatsoever from any reader,user and company that are mention on this website.  Please remember that this is a blog, and you do not need to agree with anything I write.We are not SEBI registered financial advisor or analyst.

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