Stock Split
A division of each existing share into a larger number of shares with a proportionally lower face value.
Formula
New Share Count = Old Count x Split Ratio; Adjusted Price = Old Price / Split Ratio; Face Value divides by the same ratio
Unit
shares
In depth
A split changes the face value while a bonus does not — that is the technical difference between two actions that look identical to a shareholder, since both multiply the share count and divide the price. Total share capital is unchanged in a split and rises in a bonus, because a bonus capitalises reserves. Neither creates value. The purpose is to bring a high share price into a range where smaller investors can buy round amounts, which improves liquidity. Price history must be adjusted or the chart shows a crash on the ex-date.
Worked example
A 1:5 split takes face value from ₹10 to ₹2, so 100 shares at ₹600 become 500 at ₹120. Share capital of ₹60 crore stays ₹60 crore; only the denomination changed.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Stock Split” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.