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MCX Stock Split: Multi Commodity Exchange has decided to divide each of its stocks into 5 parts, the record date of which has been fixed as January 2. What effect will this decision of the company have on investors?
New Delhi. The country’s third largest exchange, Multi Commodity Exchange of India (MCX) has revealed the record date for dividing its stock. The exchange said that on January 2, its stocks will be divided into 5 stocks in the ratio of 1. Only those who invested in it before January 2 will get the benefit of this stock split on the basis of eligibility. But, the question arises that what does this stock split mean for investors.
MCX has announced that its stocks will be divided in 1:5 ratio on January 2 and the eligibility of investors will also be decided on this basis. The stock of the exchange opened on the morning of December 18 at a price of Rs 1,006.45 per share. The exchange had stated in its filing on December 17 itself that January 2 would be used as the record date for the stock split. Earlier in September, the company had said that the shareholders had approved their share split proposal. The exchange will divide each of its stock into 5 parts, whose face value will be Rs 10 and after the split, the face value will be Rs 2 per share.
What does this mean for investors
Suppose if an investor has 10 stocks of MCX, each worth Rs 100, then after the stock split the number of shares will increase to 50 but then the value of each share will also reduce to only Rs 20 instead of Rs 100. This means that after the share split, the number of stocks will increase, but their price will reduce. However, in the above example the value of shares will remain only Rs 1,000 but their number will increase 5 times.
Which investors will benefit?
The exchange has said that the benefit of stock split will be available only to those investors who hold shares till the record date. Each share held by investors will be divided into 5 parts and its number will also increase 5 times. The purpose of splitting shares is to increase the liquidity of the stock, so that investors can get an opportunity to buy it at a lower price. Currently the price of one share is around Rs 1,000 and after the split its price will be around Rs 200. Obviously then even investors with less money will be able to buy it.
Making portfolio easy for investors
After the stock split, it will become easier for investors to build their portfolio because they will get the shares of the company at a lower price. However, this will not affect the market cap of the company. In the last one month, MCX shares have seen a rise of 3 percent, while the return in 6 months has reached 25 percent. Not only this, in the year 2025 there has been a jump of 58 percent in the company’s stocks. The market cap of the company is currently around Rs 50,895 crore.
