The Indian Railway Catering and Tourism Corporation (IRCTC) stock is set to undergo a stock split. The board has recommended a 1:5 split of the IRCTC share, which is now subject to the approval of the Ministry of Railways and shareholders.

A 1:5 split means that one equity share of the company would be split into five equity shares. A shareholder holding 10 shares, would be in possession 50 IRCTC shares after the split. The face value of the stock also goes down, in the same ratio as the split.

In case of the IRCTC share, which currently has a face value of Rs 10, the new face value after the split would be Rs 2.

Amid reports of the company announcing a stock split, the shares of IRCTC touched a new high of Rs 2,727 on Thursday. IRCTC ended the day at R 2,690.95, up by 4.95%.

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Not only the stock split, but states easing COVID-induced lockdowns is another thing working in the favour of the IRCRC share.

The stock split is being done with an aim to boost liquidity in the capital market. IRCTC also hopes to widen its shareholder base and make the stock affordable for small investors.

“The board of IRCTC today recommended the proposal for sub-division or split of company’s one equity share of face value of Rs10 each into five equity shares of face value of Rs 2 each,” IRCTC said in a regulatory filing on Thursday.

IRCTC made its market debut on October 14, 2019, and was listed at Rs 644 against its issue price of Rs 320 per share. Since listing, IRCTC stocks have zoomed five times.