ICICI Bank said on Tuesday that its board has approved a five-for-one stock split, the first such split by the country’s top private lender.

“The Board of Directors of ICICI Bank Ltd has considered and approved the sub-division (split) of one equity share of the bank, having a face value of ₹10, into 5 equity shares of face value of ₹2 each,” the bank said in a statement.

Renewing investor interest According to analysts, a stock split results in lowering of the share price, usually leading to renewed smaller or retail investor interest, which can have a positive impact on the stock.

“Every company has an FII limit and therefore, will need more retail interest in its shares after the stock price reaches a certain high. A stock split can also give the company alternate routes other than QIP to raise capital in future,” an analyst said.

On Tuesday, ICICI Bank shares ended down 1.31 per cent, at ₹1,547.70, on the Bombay Stock Exchange.

ADS impact “Each American Depositary Share (ADS) of ICICI Bank will continue to represent two underlying equity shares as at present. The number of ADSs held by an American Depositary Receipt holder would consequently increase in proportion to the increase in number of equity shares,” said the bank, in its statement.

The sub-division of shares will be subject to approval by the shareholders, which will be sought by postal ballot, and any other applicable statutory and regulatory approvals.

The record date for sub-division of shares will be announced in due course, the ICICI Bank statement added.

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