A stock split is when a company divides each of its existing shares into several new shares. The number of shares rises and the price per share falls by the same proportion, so the total value of your holding stays roughly the same. In India, a split works by reducing the face value of each share.
What a stock split is
Think of cutting a pizza into more slices: you get more pieces, but the amount of pizza does not change. In a 1:5 split, a share with a face value of ₹10 becomes five shares with a face value of ₹2 each. If you held 100 shares, you now hold 500. If the price was ₹2,500, it adjusts to about ₹500.
How it works in India
The company's board proposes the split, and shareholders approve it. The company announces a record date; investors holding shares at that point receive the extra shares in their demat accounts. On the ex-date, the share price on the exchange adjusts to reflect the split. Exchanges also adjust historical data such as past prices and 52-week highs and lows, so that charts remain comparable.
The opposite is a reverse split or consolidation, where several shares are combined into one and the face value rises.
A simple example
Before the split: 100 shares × ₹2,500 = ₹2,50,000. After a 1:5 split: 500 shares × ₹500 = ₹2,50,000. Nothing about the company's business, profits or total market value has changed. Only the number of shares and the price per share are different.
Why companies split shares
A very high share price can put off small investors and reduce trading activity. A split makes each share more affordable and can improve liquidity, meaning shares are easier to buy and sell. Some investors also see a split as a sign of management confidence, since companies often split after a long rise in price.
Stock split versus bonus issue
Both increase the number of shares and lower the price per share. In a split, the face value is reduced. In a bonus issue, the face value stays the same and the company converts part of its reserves into new shares. For shareholders, the immediate economic effect is similar.
What happens to other numbers after a split
Because the share count changes, per-share figures adjust too. Earnings per share, dividend per share and book value per share all fall in the same proportion as the price, so ratios that compare price with these figures, such as the price-to-earnings ratio, stay essentially unchanged. Market capitalisation stays about the same. This is why analysts and data providers adjust historical data after a split: without adjustment, charts and comparisons would show false jumps.
Examples on PositoAI: stock splits in India
Splits have become more frequent in India. The Actions page on PositoAI recorded 75 splits in 2022, 101 in 2023, 148 in 2024, 119 in 2025 and 94 so far in 2026.
One recent example is Bansal Wire Industries, which went ex-split on 16 Oct 2026 with a ratio of 1:5, meaning every 1 share became 5 shares. A holder of 100 shares now has 500, and the share price adjusted in the same proportion on the ex-date. Another is Shankara Buildpro, ex-split on 8 Oct 2026 with a ratio of 2:10, meaning every 2 shares became 10, the same as 1 becoming 5. (Figures as on 19 Oct 2026.)
Common misconceptions
"A split makes me richer." Not by itself; your total holding value stays about the same.
"The share became cheaper, so it is a bargain." A lower price per share after a split does not change the company's valuation.
"My shares fell 80% overnight." On the ex-date, the price drop is only the split adjustment, offset by more shares.
Frequently asked questions
Do I need to do anything to receive split shares?
No. If you hold the shares on the record date, they are credited automatically.
Does a split change dividends?
Dividend per share usually adjusts, but your total entitlement is not reduced by the split itself.
What is a reverse split?
Combining several shares into one, raising the price per share.
Are split adjustments shown in charts?
Exchanges and most data providers adjust historical prices.
How to use this on PositoAI
Upcoming and recent splits, bonuses and dividends are listed on the Actions page, with their key dates. Each company's full split history is on its own Actions tab. Read our guide to bonus issues to compare. PosiStep 9 of PosiCourse, PositoAI's free stock market course, explains splits, bonuses and other corporate actions.
Summary
A stock split divides each share into more shares with a lower face value. The share count rises and the price falls in proportion, so your holding's value stays about the same. Companies split to improve affordability and liquidity. Shares are credited automatically to holders on the record date, and the price adjusts on the ex-date.