Tata Steel Ltd (TSL) will consider a stock split at the forthcoming board meeting of the company on May 3.

If approved, TSL will join its peers from Tata Group to bring the face value of its share from Rs 10 as it stands today to one of a lower denomination.

Tata Steel is the third-largest company of the salt-to-software Tata Group by market capitalisation after Tata Consultancy Services and Titan Company Ltd.

Shares of all the top six listed Tata companies by market cap — which also include Tata Consumer Products Tata Power Ltd and Tata Motors — barring Tata Steel, have their stocks subdivided below the face value of Rs 10.

A stock split usually creates higher liquidity in the market and brings down the cost of ownership of the shares on a notional basis.

The proposed subdivision of shares follows two years of stupendous financial performance which is reflected in the stock price.

The company reported Rs 13,843.69 crore of net profit in 2020-21. In contrast, it has already amassed Rs 38,361.9 crore net profit in the first nine months of the last fiscal year.

Expectations are high that the fourth quarter result will be in line with the last three quarters.

The stock performance has mirrored the mountain of profits: in the last 24 months, the share price rose nearly 5 times from a level of Rs 265-270 to Rs 1,320 now.

Analysts said despite the input cost pressure coming from an unprecedented coking coal price hike, the balance sheets of integrated steel companies, such as Tata Steel and JSW Steel, are likely to remain healthy.

Domestic steel industry earnings over the next 12 months — year ended FY23 — are expected to remain healthy, despite input cost pressures leading to some moderation in earnings over the high watermark of FY22.

With rising steel prices partly absorbing the increase in coal and energy costs, ratings agency Icra has maintained the steel industry’s outlook to be positive.

The agency also predicted that steel demand in India will grow 7-8 per cent in this fiscal.