A stock split divides each existing share into more shares, and a bonus issue gives shareholders extra shares for free. Both make each share cheaper and increase the number of shares — without changing the underlying business.
In a 1-for-2 split (each existing share becomes two), 10 shares priced at ₹1,000 become 20 shares priced at about ₹500 each. Your total holding is conceptually the same: 10 × ₹1,000 = 20 × ₹500 = ₹10,000.
| Before split | After a 1-for-2 split |
|---|---|
| 10 shares | 20 shares |
| ₹1,000 per share | ₹500 per share (conceptually) |
| Total value ₹10,000 | Total value ₹10,000 |
A split changes the shape of your holding, not its conceptual value.
New share count = Old shares × Split ratio
Bonus shares work in a similar way but come out of the company's reserves rather than a split of face value. In a 1:1 bonus issue, you receive one extra share for every share you already hold, and the face value stays the same.
Face value
Face value (or nominal value) is the original value printed on a share, such as ₹10 or ₹2. A company can 'split' a ₹10 share into two ₹5 shares. Face value is an accounting label; the market price is what buyers and sellers actually agree on.
Corporate action simulator
See the conceptual before-and-after of the actions companies take that affect their shares.
Before
- 100 shares
- ₹1,000 per share
- Total ₹1,00,000
Conceptually after
- 200 shares
- ₹500 per share
- Total ≈ ₹1,00,000