Tata Investment share price: Why this Tata group stock crashed 90% today

Against the previous close of Rs 9,922 apiece on NSE, Tata Investment Corporation Ltd shares opened at Rs 1,042 apiece on Tuesday, down nearly 90 per cent, surprising a few investors. The fall in the shares of Tata group firm was due to the stock getting split from face value of Rs 10 each into shares with face value of Re 1 each. 

In a stock split, already owned shares are split into shares with smaller face values in a bid to increase liquidity on the counter. It is possible that trading apps of certain brokerages might be showing the unadjusted price for Tata Investments and, thus, suggesting an 90 per cent fall on the counter. Adjusted of stock split, Tata Investment shares were trading at Rs 1,042 apiece.

Tata Investment maintains a diversified portfolio of both quoted and unquoted securities, including significant holdings in Tata Group companies spanning multiple industries. The firm’s investment approach seeks to balance value and growth, focusing on long-term wealth creation.

Tata Sons holds a 68.51 per cent stake in the company. Other prominent Tata Group shareholders—including Tata Power, Tata Chemicals, Tata Steel, Tata Consumer Products, and Trent—collectively own 73.38 per cent of the company.

Following the stock split, Tata Investment’s authorised shares will expand from 6,00,00,000 shares of Rs 10 each to 60,00,00,000 shares of Re 1 each. The issued shares will also be recast, rising from 5,05,95,796 shares of Rs 10 each to 50,59,57,960 shares of Re 1 each, while subscribed and paid-up shares will increase from 5,05,95,296 to 50,59,52,960.

A stock split differs from a bonus issue. In a split, the face value of shares is reduced, increasing the number of shares outstanding, but the total value of a shareholder’s holdings remains unchanged.

By contrast, a bonus issue rewards shareholders with additional shares issued from accumulated earnings, without changing the face value. Importantly, dividends are not affected in a bonus issue, since the company’s overall capital remains the same.