MCX share price adjusts after its first-ever 1:5 stock split; check complete details

MCX shares are in focus today as the stock price is trading around ₹2,220 apiece, which is over 80% lower compared to yesterday’s closing. Many investors may be wondering why MCX stock price corrected by 80% today? The stock has not fallen, but adjusted for the stock split announced last month.

MCX, which is India’s leading commodity derivatives exchange, announced a 1:5 stock split in December and set Friday, January 2, as the record date to determine eligible shareholders for the stock split. As a result, the stock price rearranged from ₹11,015 to ₹2,230, which is only a technical adjustment and not the real fall. This is the first stock split announced by the company for its shareholders.

MCX shareholders who are eligible for the stock split will receive more shares in proportion to the stock split. If the investors had 100 shares of MCX as of January 1 closing, a 1:5 split would mean that those 100 shares with a face value of ₹10 each would turn into 500 shares with a face value of ₹2 each. As a result, the number of shares will increase, but the value will remain the same.

Why do companies do a stock split?

Companies undertake stock splits to make their shares more affordable and attractive to investors. A lower share price improves liquidity as more investors can afford the stock, as the price per share is reduced in proportion to the stock split ratio.

MCX stock performance