Kotak Mahindra Bank to Split Shares 5:1: Here’s All You Need to Know

Kotak Mahindra Bank’s board on Friday approved a 5:1 stock split at a meeting held on the bank’s 40th Foundation Day.

In an exchange filing, the bank said it will sub-divide one fully paid-up equity share with a face value of ₹5 into five fully paid-up equity shares with a face value of ₹1 each.

The bank said the split aims to make its shares more affordable and improve liquidity, encouraging wider investor participation, particularly from retail shareholders.

The authorised share capital will remain unchanged after the split. The number of authorised equity shares will rise from 28 crore shares of ₹5 each to 140 crore shares of ₹1 each, keeping the total authorised capital at ₹1,400 crore. The preference share capital remains unchanged.

Similarly, the issued, subscribed and paid-up equity share capital will stay at ₹994.37 crore, while the number of shares will increase from 19.887 crore shares of ₹5 each to 99.437 crore shares of ₹1 each. These figures may vary depending on the exercise of employee stock options.

The share split is expected to be completed within two months of obtaining all regulatory, statutory and shareholder approvals.

The move is still subject to the approval of shareholders, the Reserve Bank of India (RBI) and any other regulatory or statutory bodies, as required.

Ahead of the announcement, the private lender’s shares declined by less than half a per cent to ₹2,086.50.

The bank has previously carried out at least one stock split, in 2010, when the face value was reduced from ₹10 to ₹5. It later issued bonus shares in a 1:1 ratio in 2015.

Since 2015, Kotak Mahindra Bank’s shares have more than tripled, rising from ₹635 in January 2015 to over ₹2,000 per share now. Year to date, the private lender’s share price has gained about 17%, in line with Nifty Bank’s 15.29% return and well above the 9.79% rise in the Nifty 50.

A stock split increases the number of outstanding shares and typically improves liquidity by making the stock more accessible to investors.

At the current share price, Kotak Mahindra Bank’s market capitalisation stands at roughly ₹415 lakh crore, with a price-to-earnings ratio of 22.34.