Kotak Mahindra Bank has announced a 1:5 share split, making it one of the biggest corporate actions in the Indian banking sector for 2025. As one of India’s most respected private-sector banks, Kotak’s decision has drawn strong interest from both long-term investors and short-term traders.
But what does this share split really mean for your portfolio? Does it create value, or is it simply a psychological boost? This detailed guide breaks down the implications, market context, and what smart investors should consider before the ex-split date.
A share split increases the number of outstanding shares by reducing the face value of each share. The move doesn’t change the company’s market capitalization or the value of an investor’s holdings immediately.
Here’s what happens in a 1:5 split:
The primary reasons companies pursue share splits include:
Indian companies usually announce splits when their share prices have risen significantly over time, making the stock relatively expensive compared to peers.
Kotak Mahindra Bank has traditionally traded at a premium to many bank stocks due to its strong asset quality, prudent lending practices, and robust CASA franchise. After years of consistent growth, its stock price became relatively high, making it less accessible to small investors.
The split aligns with three key objectives:
Additionally, with the banking sector expected to see strong credit growth in 2025–26, the timing could help Kotak position itself for broader market participation.
Let’s take a simple scenario.
Before the split:
After the split:
Your wealth does not change immediately. But the stock becomes more accessible to retail investors who may have previously found it expensive.
Share splits often generate excitement, but it’s important to separate perception from reality. Still, splits like Kotak’s tend to have meaningful short-term and long-term effects.
Market analysts believe Kotak’s move aligns with its long-term growth cycle and strengthens its positioning among India’s major private-sector banks.
Corporate actions like share splits must comply with SEBI’s listing norms and disclosure guidelines. Companies must:
Kotak Mahindra Bank’s announcement follows these regulatory norms, contributing to investor confidence.
Not directly. A share split does not increase EPS, book value, net profit, or market cap. It merely divides the existing equity into more units.
However, share splits may:
The real value creation still depends on the bank’s financial performance, credit growth, margins, and risk management.
A split is not a sign of superior performance. Fundamentals matter more.
Kotak’s digital push, capital efficiency, and strong risk controls remain central to its story.
Around the ex-split date, trading activity tends to spike.
There are no special tax benefits for share splits. Capital gains are taxed as usual based on the holding period.
Liquidity improvements can help both traders and long-term investors.
Corporate actions often encourage new investors to enter the market. For those navigating such events, having access to a robust research-driven investment platform makes a significant difference.
This is where Swastika Investmart, a SEBI-registered brokerage, stands out with:
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No. The split only increases the number of shares while reducing the price proportionately. Your total investment value remains unchanged immediately.
It can be beneficial indirectly by improving liquidity and accessibility, but long-term returns depend on the bank’s financial performance.
You will not be eligible for the split. Only shareholders before the ex-date receive additional shares.
No. Taxation works as usual based on capital gains when you sell your shares.
Primarily to make stocks more affordable, boost liquidity, and attract wider participation.
Kotak Mahindra Bank’s 1:5 share split is a strategic step that enhances affordability and supports broader participation in one of India’s leading private-sector banks. While the split itself doesn’t add intrinsic value, it can create an environment that supports smoother price discovery and long-term investor engagement.
If you want to navigate such corporate actions with clarity and research-backed tools, Swastika Investmart offers a dependable ecosystem for traders and investors.
Open your Demat & Trading account here and start investing with confidence:
In stock market trading, if the stock pays regular dividends with a record of steady dividend growth is called an income stock.
Companies usually issue income stocks with stable cash flows and well-established financial infrastructure.
It's also quite common for companies that issue income stocks to have long histories of success, a large market capitalization, and to operate at a mature stage in their growth curve.
Income stocks are often compared with value stocks. While income stocks pay out dividends at a high rate, value stocks are often trading at a price lower than the company's fundamental value or the stock's book value.
Investors generally invest in income stocks to get a stable cash flow from their investment without putting too much risk on their money.
Income stocks are generally considered less risky than other types of investments.
If you face any difficulty in understanding income stocks then feel free to mail us and talk to our experts.
Income stocks are considered to be less risky as compared to growth stocks.
Suppose a company is well established and has a consistent track record of paying dividends. In that case, it can be considered an income stock.
Income stocks are considered good for investors who want stability and regular stock trading returns in dividends.
High yielding dividend stocks refer to companies with a long history of paying high dividend yields.
These companies have a steady cash flow stream and can afford to pay higher dividend yields.
Low yielding dividend stocks refer to those companies that payout low or moderate dividend yields.
Such companies generally have a stable financial position. They reinvest their cash flows into their business to expand and grow.
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Dividend-paying stocks are those whose payments are made by a company to its stockholders. Most income stocks pay dividends regularly, whether monthly, quarterly or annually.
The amount of each dividend payment can vary depending on the company's profitability.
The total amount of dividends paid by a company over a given period is its dividend yield or dividend payout ratio.
Also, Read - 5 Smart Rules to Follow While Investing in Dividend Paying Stock
Income stocks offer lower risk than many other investments - they are usually large, well-established companies with long track records of paying stable or rising dividends.
Income stocks have the potential for steady growth through reinvesting their dividends into the business or using them for acquisitions.
The price of income stocks tends to be less volatile than those of speculative growth stocks but more volatile than defensive shares (which pay lower yields and have less scope for capital gains).
It has been found that income stocks are highly defensive in nature. They don't fluctuate with the frequent changes in the market.
Income stocks don't reinvest their profits. Instead, they distribute most of their profits to the shareholders in the form of dividends. As a result, they lack a surplus fund for further investments.
These stocks provide stable dividends to shareholders as compared to other stocks.
Income stocks are less risky as they are less volatile than other stocks.
These are apt for those who have a low-risk appetite investment mindset viz students, non-income people, older people and more.
Companies that issue income stocks have a strong financial background and hence they provide stable dividends to their shareholders.
Companies that issue income stocks mostly come under the large-cap market.
Yes, it is good to invest in income stocks.
We would say that you should make sure you do not put all your eggs in one basket.
If you are investing for the long term, it makes sense to have a lot of different investments.
Income stocks are a great place to start when you begin investing as they are not too risky but offer a decent amount of risk.
One of the main reasons for stock traders to invest in defensive stocks is as a defensive measure against economic uncertainty.
These companies are so-called because they tend to be less volatile and more stable than the wider market, even in times of economic turmoil.
In this blog, we'll outline what makes a stock defensive, how to recognize which shares are defensive, and why you might want to include them in your portfolio.
To get more information about defensive stocks in detail, feel free to write to us at - hello@swastika.co.in
A defensive stock is expected to maintain a stable share price during an economic downturn or when the broader market falls.
Typically these are companies with products or services that people will continue to buy regardless of how much they spend.
Typically, defensive stocks have the following characteristics:
As a result, investors typically turn to defensive stocks to reduce risk in their portfolios, especially during uncertain times in the market cycle.
Also Read - Everything about Stock Market Trading
Stable Revenue and Earnings Growth: Defensive stocks have steady revenue and earnings growth which means they don't make large profits or losses in any particular year.
Low Debt: Most defensive stocks have very little debt. Debt is not something these companies would want to carry on their books as it affects their valuation.
High-Profit Margin: Defensive Stocks also tend to have high-profit margins, compared to other sectors, because of the stability in their businesses. This high-profit margin keeps them profitable during economic downturns.
Stable Dividends: The dividend payment for most defensive stocks is stable and growing steadily over some time.
These dividend payments are also less volatile than consumer discretionary or technology stocks.
Defensive stocks are companies that sell products and services that are considered essential and non-cyclical.
These products are not affected by economic downturns and always remain in demand.
For example, a company that sells FMCG products like soap, toothpaste, shampoo etc., or a pharmaceutical company can be considered as a defensive stock.
The recession affects the demand for these products because people still need to buy food, medicines, and other items for daily use.
Defensive stocks generally have competitive advantages like low-interest rate loans, government contracts etc.
These stocks tend to be less volatile than cyclical stocks and provide a greater level of security to investors. Defensive stocks also offer higher dividend yields.
Defensive stocks are those which can weather economic downturns and market volatility.
These stocks can provide stability to your portfolio, and hence they are known as defensive stocks.
The characteristics of defensive stocks include stable or consistent earnings, regular dividend payouts, low beta, lower risk profile and low volatility.
Defensive stocks belong to sectors with essential products or services and are used in all phases of the economic cycle.
So, when the economy is weak or during periods of uncertainty, these stocks perform relatively well compared to the overall market.
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Utilities
Electric utilities, water, and gas are examples of defensive stocks. Similarly, communications service companies such as telephone and cable television companies are also defensive.
Since utility companies primarily deal in essential services and communication, these businesses remain fairly stable during recessions.
Pharmaceuticals
Pharmaceutical companies are another example of defensive stocks. These companies generate revenue by selling drugs that treat chronic conditions like high blood pressure, diabetes, and arthritis.
Although some prescription drug sales may decrease during a downturn due to patients' inability to afford them, new customers will enter the market.
Also Read - Everything about Intraday trading.
Consumer Staples
Consumer staples are non-discretionary products that people buy regardless of income levels or economic cycles.
For example, consumers still need food and personal care items even during economic downturns.
Consumer staple stocks are also considered defensive because they offer stable earnings with modest growth prospects;
These qualities make them appealing to conservative investors seeking low-risk equities.
Food Stocks
Food stocks are a great example of defensive stocks. Food items like rice and wheat are in high demand regardless of the economic conditions.
When the economy is booming, people buy more food products, but even when the economy is struggling, they still buy basic food items like wheat and rice.
Defensive stocks are a must-have in every investor's Portfolio. They help to create a balanced portfolio and reduce overall risk.
Defensive stocks are not affected by economic downturns and hence, their value does not decrease much in bearish market conditions. These stocks are ideal for investors who want to create a diversified portfolio.
Corporate actions are key events that companies undertake, which can directly impact their stock prices, financial health, and how investors perceive them. Whether it's issuing dividends, conducting stock splits, or merging with another company, these actions play a significant role in the stock market. Let’s break down the most common corporate actions and their effects on stock prices, with examples from Indian stocks to illustrate.
Corporate actions are decisions made by a company that affect its shareholders. These actions can lead to changes in stock prices, which investors need to understand to make informed decisions. Here are some of the most common corporate actions:
Dividends are payments made to shareholders from a company’s earnings. They can be in the form of cash or additional shares.
Impact on Stock Price: When a dividend is declared, the stock price usually drops by the dividend amount on the ex-dividend date. For instance, if a company announces a ₹5 dividend, the stock price might decrease by ₹5 on the ex-dividend date.
Example: Consider a company like HDFC Bank. When it declares a cash dividend, the stock price adjusts to reflect the dividend payout. If HDFC Bank declares a ₹10 dividend, its stock price might drop by ₹10 on the ex-dividend date.
A stock split increases the number of shares outstanding by issuing more shares to existing shareholders. For example, in a 2-for-1 split, shareholders receive two shares for every one they own, but the share price is halved.
Impact on Stock Price: The total value of shares held by an investor remains the same, but the price per share changes according to the split ratio. If a stock priced at ₹200 undergoes a 2-for-1 split, the new price would be ₹100, and shareholders would own twice as many shares.
Example: Reliance Industries has conducted stock splits in the past. For instance, if Reliance's stock was trading at ₹2,000 and underwent a 5-for-1 split, the price would adjust to ₹400, but shareholders would now have five times more shares.
Bonus shares are additional shares given to existing shareholders at no extra cost, usually based on the number of shares they already own.
Impact on Stock Price: The stock price typically drops to reflect the increase in the number of shares. For example, if a company issues a 1:1 bonus, the share price might halve, but shareholders will own double the number of shares.
Example: Tata Motors has issued bonus shares before. If Tata Motors issues a 1:1 bonus, the stock price might decrease, but shareholders will have twice as many shares as before.
Mergers involve two companies combining to form a new entity, while acquisitions occur when one company takes over another.
Impact on Stock Price: The stock price reaction depends on the deal. Generally, the acquiring company's stock price might drop due to the costs involved, while the target company's stock price usually rises. The long-term effect depends on how well the deal is executed.
Example: When Hindustan Aeronautics Limited (HAL) acquired smaller defense firms, HAL’s stock price reacted to the perceived benefits of the acquisition. Conversely, the stock of the acquired firms often saw a spike.
A rights issue allows existing shareholders to buy additional shares at a discount to the current market price.
Impact on Stock Price: The stock price might fall to account for the dilution due to the new shares being issued. For example, if a company issues new shares at ₹50 while the current price is ₹83, the market price might adjust downward to reflect the dilution.
Example: If Infosys announces a rights issue at ₹1,000 when the market price is ₹1,200, the stock price might fall to around ₹1,050 to reflect the new shares being issued.
Impact on Stock Prices
Immediate Reaction: Corporate actions often cause immediate fluctuations in stock prices. For instance, a dividend announcement can lead to a temporary drop in stock price on the ex-dividend date.
Long-Term Effects: The long-term impact depends on how the corporate action affects the company's overall financial health and future prospects. Successful mergers or strategic stock splits can lead to increased stock prices if they create value and growth opportunities.
Corporate actions are significant events that can influence stock prices in various ways. By understanding these actions—such as dividends, stock splits, bonus shares, mergers, and rights issues—investors can better navigate the stock market. Monitoring these events helps investors make informed decisions and anticipate market reactions, allowing them to align their strategies accordingly.
पिछले सप्ताह में सोने और चांदी के भाव तेज़ रहे क्योंकि रूस और यूक्रेन के बीच चल रही शांति वार्ता में कोई खास प्रगति नहीं हुई। जिसके कारण लगातार अनिश्चिता और मुद्रास्फीति दोनों बढ़ने के कारण निवेशकों की सुरक्षित निवेश की मांग से कीमती धातुओं के भाव तेज़ हो रहे है।
गुरुवार को नाटो प्रमुख और यूरोपियन यूनियन देशो के साथ प्रेसिडेंट जो बाइडेन की बैठक हुई जिसमे रूस पर कुछ अतिरीक्त प्रतिबंद लगाए गए। इसमें रूस द्वारा पश्चिमी प्रतिबंधों को कम करने के लिए किये जा रहे सोने में लेनदेन और कच्चे तेल की आपूर्ति पर निशाना साधा गया है।
कजाकिस्तान की कच्चे तेल पाइप लाइन से इसकी आपूर्ति रुकने के कारण पिछले सप्ताह कीमते तेज़ रही और बढ़ती हुई कच्चे तेल की कीमतों से कीमती धातुओं के भाव को समर्थन मिला है।
हालांकि, अमेरिकी बांड यील्ड 2019 के उच्च स्तरों के पास पहुंच चुकी है और इसमें लगातार चल रही बढ़ोतरी के कारण कीमती धातुओं के भाव में ऊपरी स्तरों पर दबाव भी रहा है। रूस - यूक्रेन युद्ध और एनर्जी कीमतों में बढ़ोतरी आवश्यक वस्तुओ की आपूर्ति को चिंता में डाल रहा है।
यूरोपियन देश रूस से कच्चे तेल का बड़ा हिस्सा आयात करते है प्रतिबंधों के कारण कीमतों में अप्रत्याशित बढ़त को रोकने के लिए अमेरिका, यूरोपियन देश को कच्चे तेल और प्राकृतिक गैस की आपूर्ति बढ़ाएगा।
इस सप्ताह बाजार की नज़र अमेरिकी एडीपी नॉन फार्म एम्प्लॉयमेंट चेंज और पैरोल के आकड़ो पर रहेगी जिससे कीमती धातुओं के भाव को नई दिशा मिल सकती है।
इस सप्ताह भी सोने और चांदी के भाव में तेज़ी जारी रहने की सम्भावना है। जून वायदा सोने में 51500 रुपये पर सपोर्ट और 53000 रुपये पर प्रतिरोध है। मई वायदा चांदी में 67000 रुपये पर सपोर्ट और 71000 रुपये पर प्रतिरोध है।
Swastika comes with the fresh information of Life Insurance Corporation of India's initial public offering (IPO) which will hit the market next month. Here, we will discuss the latest LIC IPO Updates including issue, closing, allotment date and more.
The IPO comprises over 31.6 crore shares or five per cent of the government's stake in the insurance behemoth.
India is all set to launch the country's largest-ever public offering, as the state-run Life Insurance Corporation of India (LIC) filed a Draft Red Herring Prospectus (DRHP) with the SEBI for selling a five per cent stake by the government.
Employees and policyholders of the insurance giant would get a discount over the floor price.
For this, it is mandatory that the policy should have been issued on or before February 13, 2022. Investors must link PAN to the policy by February 28, 2022
LIC IPO Price Band Coming soon LIC IPO Date Coming soon Fresh issue NIL Offer For Sale 316,249,885 shares Total IPO size 316,249,885 shares Face Value INR 10 per share Minimum bid (lot size) Coming soon Retail Allocation 35% Listing On NSE, BSE
The investors' portion for QIB is 50%, NII is 15%, and Retail is 35%.
Of which, 50 percent will go to retail investors, 15 percent to non-institutional investors (NII) and 35 percent to qualified institutional buyers (QIB).
If a policyholder does not update PAN details by February 28, 2022, they will not be eligible for availing the reserved shares of LIC's IPO.
A policyholder shall ensure that their PAN details are updated in the policy records of LIC at the earliest.
To get the benefit of a discount on the price of LIC IPO. LIC policyholders Should link your Pan Card with Policy; the following are the steps to link your Pan.
How to Update PAN details on the LIC Website
Life Insurance Corporation of India (LIC) continues to be the market leader, with a 66% share in the overall life insurance market, followed by HDFC
Life Insurance at 9.8%, ICICI Prudential Life Insurance at 8.4%, Aditya Birla Sun Life Insurance at 5.4% and SBI Life Insurance at 4.2%.
"It is not surprising that LIC has maintained its leadership position amid the Covid-induced crisis," said Madan Sabnavis, chief economist at CARE Ratings Ltd., "due to its vast network across India and strong brand recall among customers."
For the roadshows of Life Insurance Corporation of India's (LIC's) listing, the government will approach large investors who have not yet anchored any initial public offering (IPO) and those who focus only on large public offerings, officials in the know said.
In an effort to connect with more than 180 investors, government officials have started virtual roadshows.
The roadshows are part of the government's preparations for the biggest-ever public listing in India.
The government wants to make sure that there is a good spread among anchor investors and it is not just limited to a few big names.
The Government of India is approaching new investors as well.
LIC IPO is going to be the biggest IPO in India.
बढ़ती हुई मुद्रास्फीति को नियंत्रित करने के लिए पिछले सप्ताह अमेरिकी फ़ेडरल बैंक की मौद्रिक नीति की बैठक के दौरान कीमती धातुओं के भाव में बिकवाली का दबाव बना रहा और सप्ताह भर में सोने के भाव 2.7 प्रतिशत और चांदी के भाव 3.5 प्रतिशत टूट गए। फेड द्वारा ब्याज दरों को 0.25 प्रतिशत से बढ़ा दिया गया है जिससे अब ब्याज दरे 0.50 प्रतिशत पर पहुंच गई है।
मार्च 2020 में कोविड -19 संकट के फैलने के बाद से यह पहली वृद्धि है। केंद्रीय बैंक ने यह भी आगाह किया कि इस साल छह बार और दरों में बढ़ोतरी हो सकती है, जो कि नीति-निर्माण फेडरल ओपन मार्केट की कैलेंडर बैठकों की संख्या के आधार पर हो सकती है। बैंक ऑफ़ इंग्लैंड ने भी पिछले सप्ताह हुई अपनी मौद्रिक नीति में ब्याज दरों को 0.25 प्रतिशत से बढ़ा दिया है जबकि बैंक ऑफ़ जापान ने ब्याज दरों में कोई बदलाव नहीं किया है।
अनिश्चितता ने सोने को लगातार दूसरे सप्ताह दबाव में रखा है, जो नवंबर के बाद से प्रतिशत के लिहाज से सबसे बड़ी साप्ताहिक गिरावट है। फिर भी, ब्याज दरों में बढ़ोतरी और रूस-यूक्रेन युद्ध के नतीजों के बारे में चिंताओं ने सोने के दोहरे आर्थिक-राजनीतिक बचाव को प्रभावित किया लेकिन कॉमेक्स वायदा सोने का सपोर्ट 1900 डॉलर, जो इस सप्ताह के शुरू में संक्षिप्त रूप से टूट गया था, बनाये रखने में कामयाब रहा है।
रूस और यूक्रेन के बीच चल रही शांति वार्ता के दौरान भी असल शांति की खबरों का आभाव रहा है, जो कीमती धातुओं के के भाव को निचले स्तरों पर सपोर्ट कर रही है। चीन में चल रही मंदी भी कीमती धातुओं के भाव को सपोर्ट कर रही है।
इस सप्ताह सोने और चांदी के भाव में निचले स्तरों से उछाल आने की सम्भावना है। अप्रैल वायदा सोने में 51000 रुपये पर सपोर्ट और 52000 रुपये पर प्रतिरोध है।मई वायदा चांदी में 67000 रुपये पर सपोर्ट और 69500 रुपये पर प्रतिरोध है।
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