Canara Bank's shares began higher today on the NSE, reaching an intraday high of ₹118.90 each.
A stock subdivision was recently announced by the Canara Bank board, with each equity share being valued at ₹2 instead of the current face value of ₹10 per share.
A significant player in the PSU bank stock market, Canara Bank shares, saw a spike in buying activity today in tandem with the stock trading ex-split. The board of directors predetermined this momentous day when they established May 15, 2024, as the record date for the 1:5 stock split. Canara Bank shares closed at ₹113.30 a share on the NSE on Tuesday, adjusted for the split.
Tuesday's adjusted close price of ₹113.30 per share was significantly increased by 5% to the post-adjustment opening price of ₹116.25 per share on the NSE today, which reached an intraday high of ₹118.90 per share.
Experts in the stock market predict that the stock split would increase trading activity for Canara Bank shares, which are still valued favourably. Following the split, the shares can be purchased for a potentially advantageous PE multiple of 1.47, which suggests that the PSU bank has effectively controlled its funding costs. In the post-stock split period, these analysts predict that Canara Bank shares would rise even higher, providing investors with a possible opportunity.
Target share price for Canara Bank
Vice President—Research at SMC Global Securities Saurabh Jain said, "With the recent peak in interest rates, the cost of funding has emerged as a crucial factor in selecting a banking stock." Jain was giving his thoughts on Canara Bank's share price prognosis. Despite being lower than its peers, Canara Bank's CASA ratio points to a prospective low cost of funding and strong income in the next quarters. Canara Bank shares are anticipated to outperform their counterparts in the foreseeable future thanks to this advantage."
Prabhudas Lilladher's Technical Research Analyst, Shiju Koothupalakkal, offered his technical analysis of shares of Union Bank and Canara Bank. He clarified, saying, "At the moment, Canara Bank is encountering resistance between ₹119 and ₹120 per piece. But if this barrier is overcome, we should anticipate that the state-owned stock will rise over its current record high of ₹126.58 and reach new heights."
Splitting of the Canara Bank stock
A stock subdivision was recently announced by the Canara Bank board, with each equity share being valued at ₹2 instead of the current face value of ₹10 per share. The board also decided to record the stock split on May 15, 2024.
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