Tata Motors Stock Split Date: Everything Investors Must Know

Tata Motors, one of India's foremost automobile manufacturers, has recently declared a stock split in the ratio of 1:2. This action has generated excitement among investors and market analysts. Here’s all that you need to know about the stock split and the impact Tata Motors stock performance.

What is a Stock Split?

A stock split is a corporate action that increases the number of outstanding shares by dividing each share into multiple shares (reducing the share price and keeping the same market capitalization). In a 1:2 stock split of Tata Motors, which means, for every one share of investor now they have two shares.

Tata Motors Stock Split: Key Details

• Record Date: The record date for the split will be in January, 2025 as per Tata Motors. This date is important because only shareholders on this date will be entitled to receive the split shares.

• Reason: The split would improve liquidity, increase affordability for retail investors, and help drive up trading volumes.

• Impact on Share Price: Tata Motors has told its shares on December 28, 2024, ₹740 is trading. After the split, given the new base price, it should be around ₹370/share.

What Would be the Impact of a Stock Split

• Streamlining Retail Participation: A lower share price would result in a bigger pool of investors for Tata Motors.

• Enhance liquidity: Trading volume tends to grow with a lower share price which leads to greater liquidity in the market.

• Generalist Appeal: The move is meant to reward the existing shareholder base while appealing to more generalist investors.

Impact on Investors

• Higher Affordability: The stock will be priced lower at subsequent trading, making them accessible to even small investors, thus helping to boost the stock price.

• No Change in Total Value: The number of shares you hold will double, but the total value of your investment will not change, as the stock price will adjust in proportion.

• Potential Long-Term Growth Investment: The split creates a long-term growth opportunity for Tata Motors, as strong fundamentals and leadership in the EV segment make it a promising long-term investment.

Tata Motors Reports Solid Gains, Strong Potential

• Year-To-Date Performance: The stock has dipped some 6% in 2024 under some pressure, but it is still a quality long-term growth stock.

• ROE: Tata Motors has a strong return on equity (ROE) of 36.97%, indicating that it is using shareholder funds efficiently.

• EV Leadership: Tata Motors remains the market leader in the electric vehicle space, which will be a major growth driver going forward.