Public sector banking institution Canara Bank has officially declared May 15 as the record date for a forthcoming stock split, with the bank’s shares set to be divided in a ratio of 1:5.

This means that each equity share currently with a face value of Rs 10 will be subdivided into five individual shares, each holding a reduced face value of Rs 2.

This strategic move is designed to enhance the liquidity of Canara Bank's shares and make them more affordable and accessible to a broader base of retail investors.

The decision to implement a stock split was ratified by the bank’s board to make the shares more appealing and affordable to individual investors, potentially increasing both the trading volume and active participation in the bank’s stock trading.

Stock splits are often utilized by companies as a method to lower the trading price of their shares without affecting the underlying market capitalization, thereby attracting a wider array of investors.

So far, in the year 2024, Canara Bank's shares have experienced a remarkable surge, increasing by over 32 per cent.

This notable growth in stock value contrasts with a minor decline observed on April 19, when Canara Bank’s shares dipped by 0.7 per cent to Rs 579 per share during intraday trading.

This decline occurred in a market environment where the benchmark Nifty 50 index slightly rose by 0.1 per cent.

Adding to the bank's narrative in the financial markets, Fitch Ratings recently assigned a 'BBB-' credit rating to Canara Bank, while maintaining a stable outlook.

The rating agency highlighted a revival in the bank’s loan growth, particularly in the agricultural and corporate sectors.

Despite a cautious approach in retail lending compared to its peers, Canara Bank has maintained a balanced strategy across its lending portfolios.

Investor movements in the bank's shares have also been noteworthy.

Prominent investor Rekha Jhunjhunwala reduced her holdings in Canara Bank, lowering her stake to 1.5 per cent in the quarter ending March from 2.1 per cent at the end of December 2023.

Similarly, foreign institutional investors have scaled back their investments, with their stakes dropping to 10.57 per cent in the March quarter from 11.2 per cent in the previous quarter.

Overall, institutional investors' holdings in the bank have decreased to 24.96 per cent from 25.5 per cent.

These developments reflect a dynamic phase in Canara Bank’s operations, with the upcoming stock split poised to potentially foster greater investor engagement and market activity surrounding its shares.