Adani Power shares jump another 17% after adjusting for stock split

Shares of Adani Group's Adani Power Ltd. surged another 17% on Monday, September 22, as the stock began trading adjusted for its sub-division of shares, or stock split.

Along with its June quarter results, Adani Power had announced that it will be splitting one share of the company with a face value of ₹10 each, into five shares having a face value of ₹2 each.

Shareholders who had the shares of the company in their demat account as of Friday's trading session, will be eligible for the stock split adjustment. Those who buy shares today, will not be eligible.

For example, if you held 100 shares of Adani Power at the end of Friday's trading session, the total number of shares in your demat account will adjust to 500, (adjusting for the 1:5 split). Therefore, instead of 100 shares of ₹10 each, you'll have 500 shares of ₹2 each.

This means, that although the number of shares in your demat account would increase, the value of those shares would remain the same.

A company generally carries out a stock split to make its shares more accessible to both current and potential investors. The action increases the listed company's liquidity as well.

Adani Power's shares were also in the spotlight last week, when brokerage firm Morgan Stanley had initiated coverage on the stock with an "overweight"

rating and a price target of ₹818 per share, implying a potential upside of 29% from the previous day's close. You can read more on that here.

Adani Group stocks, including Adani Power had surged in Friday's trading session after market regulator Securities and Exchange Board of India (SEBI) had given a clean-chit to the group against multiple allegation levelled by short-seller Hindenburg Research, back in 2023.

Shares of Adani Power are trading 17% higher at ₹166.65. The stock had ended 13.4% higher on Friday in reaction to the combination of both of these news points at ₹716.42. The stock has gained 20% in the last one month, taking its year-to-date advance to 36%.