In a move that will make the shares more affordable and pave way for its increased liquidity in the market, the Board of Directors of the J&K Bank Ltd, has opted for a 1:10 stock split (Ten shares of Rs. 1/- each for every one share of Rs. 10/-  held) at its meeting held on 12th June, 2014. An investor-friendly move of the Bank is intended to help more investors — particularly small investors — to get into the stock investment mode. And hence they would be welcome. The decision of the Board however, would be subject to approval of the shareholders at the ensuing Annual General Meeting of the Bank scheduled to be held on 2nd August, 2014.

Presently market liquidity of Shares of the Bank has been reduced drastically because Government of J&K (53.17%) along with Foreign institutional investors (28.77) hold 81.94% of total equity shares of the Bank and the remaining 18.06% is held by other Investors. 

The low liquidity with price hike, two factors together, made the Bank’s share unaffordable for the small retail investors like Resident Individuals. The decision to sub-divide the share face value would increase the liquidity and will make stock more affordable particularly at the retail end. The decision will also help in creating investor wealth over a period of time.