Glossary

Stock Split

A stock split divides existing shares into smaller units by reducing face value proportionally, increasing share count without touching company reserves.

What It Means

A stock split divides each existing share into smaller units by reducing its face value in the same proportion, increasing the number of shares outstanding without touching the company's reserves. A 2:1 split turns one share into two, each worth roughly half the price.

Example

Say a company's share has a face value of ₹10 and trades at ₹800. In a 2:1 split, each existing share becomes two shares with a face value of ₹5, and the market price adjusts to roughly ₹400 per share. A shareholder who held 50 shares worth ₹40,000 now holds 100 shares still worth about ₹40,000.

Stock Split Meaning, Example & vs Bonus Issue | TraderStack