Shriram Finance Share Prices Trade Ex-Split: Price Dropped 80%

Shriram Finance share prices dropped by 81% today on 10th December, to Rs. 529. The stock closed at Rs. 2,809.85 on the previous trading day. The prices opened at Rs. 566 apiece on Friday. Why did the prices fall all of a sudden today? Read to know more.

Shriram Finance Stock Split

Shriram Finance share prices have been gaining attention from investors for the past few days since the company announced a 1:5 stock split, which indicates that one share of the company will be divided into 5 shares. On 1st January 2025, the company announced 10th January 2025 as the record date for the stock split. 

The 80 per cent fall in certain brokerages might show the unadjusted prices of Shriram Finance for yesterday. When adjusted for the split, the prices are trading lower by 3.18 per cent at Rs. 544.10 as of 11:20 AM. 

Impact of Shriram Finance Stock Split

Shriram Finance split each of its Rs. 10 face value equity shares into 5 equity shares of Rs. 2 each. This corporate action lowered the stock price as the market price adjusted to the split. Brokerages have maintained a “buy” rating for Shriram Finance, offering a noteworthy 43% upside potential. The overall market sentiment about Shriram Finance remains optimistic, even though the prices will decline in the short term due to the stock split. 

Shriram Finance Stock Performance

Over the past year, Shriram Finance stock prices have risen by 25%, with a 52-week high of Rs. 730 and a 52-week low of Rs. 439 after the stock split adjustment. However, the shares have fared poorly in the short run, dropping 3 per cent in the last 6 months, 20 per cent in the last 3 months and 13 per cent in the last 1 month. Shriram Finance’s stock price gave a multi-bagger return of 123% and 139% in the last 2 and 3 years, respectively. 

This Mumbai-based non-banking finance company is part of the Shriram Group and is involved in the business of commercial vehicle (CV) financing and focuses majorly on trucks. 

Shriram Finance Quarterly Results

In its Q2 FY25 announcement, Shriram Finance reported a 17.93% YoY revenue growth to Rs. 10,090 Cr. and a YoY net profit growth of 17.99% to Rs. 2,153 Cr. The company has maintained strong financial performance with an operating margin of 71.55%. The net profit margin stands at 20.33%. It also has a healthy dividend yield and dividend payout of 8.36% and 21.6%, respectively. Kotak Institutional Equities expects the company to report positive loan growth in its Q3FY25 report. 

Summary

Stock splits are generally viewed positively by investors as they make the share prices more affordable for retail investors and potentially increase trading volumes. Shriram Finance’s strong fundamentals and the market’s optimism signal long-term growth potential for the company. Investors are awaiting Q3 results to assess the latest performance.