Kotak Mahindra Bank clears plan for stock split, subject to regulatory approvals

Kotak Mahindra Bank Limited today announced that its Board of Directors, at a meeting held on the occasion of the Bank’s 40th Foundation Day, approved a sub-division (stock split) of its equity shares, subject to regulatory and statutory approvals.

The Board has approved the sub-division of one existing equity share of the Bank having a face value of ₹5 each, fully paid-up, into equity shares having a face value of ₹1 each, fully paid-up. This move aims to make Kotak’s equity shares more affordable and enhance liquidity, thereby encouraging broader market participation, particularly among retail investors.

A stock split is when a company increases the number of its shares by dividing each existing share into multiple new shares. This reduces the price per share, but the overall value of your investment stays the same.

For example, if a company announces a 1:5 stock split, one share becomes five shares. So, if one share was ₹5,000, after the split, each new share might be around ₹1,000. Your total value remains ₹5,000 (₹1,000 × 5 shares).

C S Rajan, Part-time Chairman, Kotak Mahindra Bank, said, "On this momentous occasion, to encourage wider investor participation by making the Bank’s equity shares more affordable and liquid, the Board has, subject to regulatory and statutory approvals, decided to sub-divide the existing equity shares of face value of ₹ 5 each into equity shares of a smaller denomination of ₹1 each."

Consequently, the Board has also approved an amendment to the Capital Clause of the Memorandum of Association of the Bank to reflect the revised share structure, post-split.

These approvals are subject to consent from the Bank’s members, the Reserve Bank of India (RBI), and other applicable regulatory authorities. The process is expected to be completed within two months from receiving all necessary clearances, as per the press release.

Ashok Vaswani, Managing Director and CEO, Kotak Mahindra Bank, said, "Forty years ago, we began a journey rooted in trust and innovation. Today, as we celebrate this remarkable milestone, we also look ahead with a renewed ambition. The decision to implement a stock split echo our commitment to inclusivity, so that more investors can join us in the Kotak growth story."

How a stock split benefits investors

Companies usually split shares when their performance is strong and the share price has risen significantly. This often signals confidence in future growth. A lower share price makes it easier for small investors to buy and trade the stock. More shares in the market mean buying and selling become smoother, often reducing price volatility. Nonetheless, a lower price per share may attract new investors, which can sometimes push the stock price up due to higher demand.