Shares of Tata Steel led the market rally today after the stock turned ex-split on July 28. The stock split in the ratio of 1:10 has awarded 10 shares in the hands of shareholders for each share they owned. Hence, the value of the Tata Steel stock has gone down by 1/10th after the stock split. For example, Tata Steel stock was trading near Rs 1,000 before the stock split on Thursday. Currently, the stock is trading at Rs 106.80, up 6.43 per cent.
After the split, the fresh data for the yearly high reflects 1/10 th of the previous value.
The numbers of shares have increased by 10 times for those holding the stock.
Similarly, the stock before the split had logged a 52-week high of Rs 1,534.60 on August 16, 2021 and a 52-week low of Rs 827.10 on June 23, 2022.
BSE website shows the stock hit a 52-week high of Rs 153.46 on August 16, 2021 and a 52-week low of Rs 82.71 on June 23, 2022. The historical data for the Tata Group share has also got adjusted for the stock split.
ALSO READ: Tata Steel shares surge 5% a day after stock split
However, the total amount invested remains unchanged. This gets reflected in the market capitalisation of the firm. Market cap of the firm rose to Rs 1.30 lakh crore with a 6.73 per cent rise in the stock in the afternoon session today. Before the stock split, the market cap of the firm stood around Rs 1.20 lakh crore on BSE.
Companies conduct stock splits primarily to make their shares more affordable for investors.
ALSO READ: Tata Steel net profit falls 21% YoY to Rs 7,714 crore in Q1FY23
Meanwhile, the stock hit an intraday high of Rs 109.30, rising 8.92 per cent against the previous close of Rs 100.35 on BSE. The stock was the top Sensex gainer today. It opened with a gain of 2.64 per cent at Rs 103. Later, it closed at Rs 107.80, rising 7.42 per cent on BSE.
Here’s a look at what experts said about the outlook for the stock.
Tirthankar Das, Head of Technical Research, Ashika Group
“Shares of Tata Steel have witnessed buying demand in the last one month forming higher peak and higher trough in the weekly time frame. Recent surge in prices has led the stock to form a bullish ‘Rounding bottom’ formation in daily chart with the crucial neckline resistance seen around Rs 108-Rs 110. The pattern signifies a reversal in long-term price movement. Volume and price are moving in tandem, thus confirming price action. Hence, long-term investors can accumulate the stock when the neckline of the pattern is broken with target measuring the height of the actual pattern i.e. around Rs 125.”
Pavitraa Shetty, Co-founder & Trainer, Tips2Trades
“Despite expectations of muted Q1FY23 earnings, Tata Steel stock price has risen consecutively for the past few sessions due to a sharp uptrend in global markets despite clear signals that Europe & US could have surely entered into a recessionary period. The stock looks overbought with Rs 109 acting as a major resistance. Investors are advised to book profits at current levels and wait for a dip near Rs 94- Rs 96 to re-enter.”
