Synopsis: Tata Investment Corporation’s stock price appeared to crash nearly 90% today, shocking investors. However, the sharp decline wasn’t due to any fundamental issue — it was the result of a stock split, not a market crash.
Investors were left puzzled on Tuesday when Tata Investment Corporation Ltd (TICL) shares seemed to nosedive by nearly 90%, opening at ?1,042 apiece on the NSE — a steep drop from the previous close of ?9,922. But the dramatic fall was purely technical, not financial.
The reason? A stock split. Tata Investment’s shares were split from a face value of ?10 each to Re 1 each, increasing the total number of shares while maintaining the same overall market value.
In a stock split, a company divides its existing shares into smaller units to make the stock more affordable and improve liquidity. So, while the number of shares increases, the total ownership value for shareholders remains unchanged.
Some brokerage apps may have shown unadjusted prices, misleading investors into believing the stock had crashed by 90%. Adjusted for the split, Tata Investment shares continued trading around ?1,042 apiece — reflecting no real loss in value.
Tata Investment, a key Tata Group firm, manages a diversified portfolio of both listed and unlisted companies, including major Tata entities such as Tata Steel, Tata Power, Tata Chemicals, Tata Consumer Products, and Trent. Tata Sons holds a 68.51% stake, while other Tata Group firms collectively own 73.38% of the company.
Following the split, Tata Investment’s authorised share capital will increase from 6 crore shares (?10 each) to 60 crore shares (Re 1 each). Similarly, issued and paid-up shares will rise tenfold to reflect the reduced face value.
It’s essential to note that a stock split is not the same as a bonus issue. In a split, only the face value changes — not the capital. In a bonus issue, companies issue additional shares to existing shareholders without changing the face value.
For investors, this means no change in ownership value, only a higher number of shares trading at lower face value.
So, while the app might show a “90% crash,” the reality is simple — it’s a split, not a slump!
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors are advised to verify data from official exchange notifications and consult a financial advisor before making investment decisions.
