New Delhi:  As the 1:10 stock split of Eicher Motors became effective on Monday, the automobile company surged as much as 10%, making it the top gainer on the Nifty in percentage terms. As per the business daily Mint, the Royal Enfield motorcycle-maker made gains for the third day with the stock currently trading 6.76% higher at Rs 2,316.95 as compared to 0.5% gain in Nifty 50 index. Eicher Motors shares ended 1.5% higher at ₹21,702 (pre-stock-split). Also Read: 'Corona Kavach' Amid Pandemic! Here's Why You Must Consider Taking Covid-19 Health Insurance Policies

In June, the board of the automobile company gave a nod to a stock split in the ratio 1:10, allowing sub-division of equity shares of the company from the existing one (1) equity share of the face value of Rs.10 each into ten equity shares of the face value of Re 1 each.

The idea of the stock split announced on May 25 was to make the shares more affordable for the small retail investors and at the same time infuse liquidity.

After a prolonged slump due to Covid-19 induced lockdown and other measures to contain the spread of disease, auto stocks have outperformed this month on expectations of a revival in sale numbers. The Nifty auto index has jumped 11% in past one month as compared to 2% advance in Nifty50 index.

At the time of results, Eicher Motors Managing Director Siddhartha Lal said: "The previous quarter put forth unprecedented challenges for the industry and for Eicher Motors. However, we believe that the long term potential for both Royal Enfield and VECV is very promising."

In a battered economy, Eicher Motors reported a consolidated net loss of ₹55 crore for the first quarter ended June 30 as sales were hit due to the pandemic. The company had posted a net profit of ₹452 crore in April-June period of last fiscal.

Total revenue declined 66% in the first quarter to ₹818 crore, as compared with ₹2,382 crore in the same period of 2019-20, as per the business daily Mint. While Royal Enfield had reported 26% decline in total sales at 40,334 units July with the company selling around 54,185 units in the same month in 2019. Domestic sales were at 37,925 units, as against 49,182 units in the same month last year, down 23 per cent.