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A stock split is a corporate action that increases a company’s share count. A stock split reduces the market price of individual shares but has no effect on the company’s total market capitalization. Companies frequently split their stock when the share price has risen significantly to lower the trading price to a more comfortable range for investors and to increase the liquidity of trading in their shares. Most investors prefer to buy 50 shares of a Rs. 1000/stock rather than 5 shares of a Rs. 10,000/stock. 

The board of directors of a company can choose to split the stock in any ratio. For example, a stock split could be 2-for-1, 5-for-1, 10-for-1, and so on. A 5-for-1 stock split means that for every one share an investor currently owns, there will now be five. Divide the old share price by 5 to get the price per share after the 5-for-1 stock split.

The Stock Split shares will be delivered to you within 3-4 trading days of the record date. If you have not received the same after 5 days, you can check the status with the Registrar (RTA).  The Registrar’s contact information can be found on the BSE India website in the Corp Information section.

Record Date – determines which shareholders are entitled to additional shares as a result of the split.

Ex-Split Date – The ex-date is usually set one business day before the record date because India uses a T+2 rolling settlement for share delivery.

Companies can take a variety of actions that may impact their capital structure depending on market developments and situations. A reverse stock split is a corporate action that reduces the number of outstanding stocks of a company. It is also known as a stock consolidation, stock merge, or share rollback. If an investor owns 100 shares of a company and the board of directors announced a 2-for-1 reverse stock split, the investor will end up with 50 stocks. The total share value would remain constant. If the 100 shares were worth INR 500 each before the reverse split, the fifty shares would be worth INR 1000 each after the split. In either case, total investment remains INR 50,000. On the other hand, It is frequently used to assist a company in meeting the minimum requirements to remain listed on an exchange.