Why Trent shares suddenly dropped 33% today

Why Trent shares suddenly dropped 33% today

Shares of Tata Group's retail venture, Trent Ltd., witnessed a steep decline of over 33% today. The drop came after the company's stock traded ex-bonus for its recently announced bonus issue.

The shares were trading at ₹2,771 in morning trade on Nifty, down from Wednesday's closing price of ₹4,257.6.

However, this sharp decline is mostly due to the stock price adjustment post-bonus issue and not an actual loss in value.

Trent's bonus share issue in the ratio of 1:2

Trent's bonus share issue, announced after its June quarter results, is in the ratio of 1:2.

This means eligible shareholders will get one bonus share for every two shares they hold as of the record date.

The ex-date for this issue was set as June 4.

On an ex-bonus adjusted basis, Trent's stock was also down 2.4% at ₹2,771, making it the top loser on the Nifty 50 index today.

Trent stock gained 15.5% over past year till Wednesday's close

Despite the short-term dip, Trent's stock has performed well in the long term.

The stock has gained 15.5% over the past year till Wednesday's close, outperforming Nifty 50's 4.9% decline during the same period.

The company has a market capitalization of over ₹1.5 lakh crore.

HSBC remains bullish on Trent stock with a 'Buy' rating and a target price of ₹4,910 per share (pre-bonus adjustment), implying a potential upside of 15%.