On Tuesday, ICICI Bank Ltd. (IBN) announced that its board of directors approved a five-for-one stock split, which is subject to shareholders, statutory and regulatory approvals. The record date of the first stock spilt by India’s largest private sector bank will be declared later.
The bank further stated that the number of underlying equity shares per American Depositary Share (ADS), which at present is two shares, will remain same and the split will raise the number of ADSs in proportion to the increase in number of shares. As of Jun 30, 2014, ICICI Bank had 115.6 million shares outstanding.
Following the news, ICICI bank’s ADS trading on the New York Stock Exchange (NYSE) fell 1.4% while the shares of the bank trading on the Bombay Stock Exchange (BSE) gained 1.5%.
Stock split is usually undertaken by companies to decrease the price of shares, which are either very high or trading beyond the price level of industry peers. Such a move reduces the share price, making the stock accessible to small investors.
Moreover, stock splits are beneficial in enhancing market capitalization of a company as the shares become attractive to retail investors and the demand rises.
ICICI Bank, with an extensive client base and strong capital position, remains well positioned for future growth and expansion. In fact, ADSs of ICICI Bank have gained 47.6% year-to-date.
At present, ICICI Bank sports a Zacks Rank #2 (Buy).
Other foreign banks worth considering include HSBC Holdings plc (HSBC), Mizuho Financial Group, Inc. (MFG) and Banco Santander (Brasil) S.A. (BSBR). All these hold the same Zacks Rank as ICICI Bank.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment