What is a Stock Split?

What is a Stock Split?

A stock split is a corporate action where a company increases the number of outstanding shares by reducing the face value of each share. Companies generally implement stock splits to improve liquidity and make shares more affordable for investors.

Although the share price decreases after a split, the total investment value remains the same. The newly split shares are usually credited to the investor’s Demat Account within 2 days.

Stock Split Impact Table

Split Ratio	Old Face Value (₹)	Shares Owned Before Split	Share Price Before Split (₹)	Investment Value Before Split (₹)	New Face Value (₹)	Shares Owned After Split	Share Price After Split (₹)	Investment Value After Split (₹)
2:1	10	100	900	90,000	5	200	450	90,000
5:1	10	100	900	90,000	2	500	180	90,000

In all cases, while the number of shares increases, the price per share decreases proportionally, ensuring that the total investment value remains unchanged.

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