What is a Stock Split?

A stock split divides existing shares into a larger number of shares by reducing the face value of each share proportionately. For example, 

• Suppose a stock trades at ₹1,000 before a 1:2 split. 
• The theoretical post-split price could be approximately ₹500.
• At the same time, an investor holding one share would now hold two shares.

Stock Split Effect on Price in India

The stock split’s effect on the stock’s current market value is primarily a “mechanical adjustment”. In the stock split, only the number of shares increases while the economic value represented by each holding remains proportionately unchanged. This happens because the market price per share is adjusted downward in the same proportion.

Actual market prices after the stock split can subsequently move based on:

• Supply and demand
• Company performance
• Earnings expectations, and 
• Broader market conditions.

Analyse Stock Splits With Real-Time Market Data

A stock split changes the number of shares and adjusts the per-share price proportionately. Trade246 gives you access to real-time market prices to monitor stock price movements “before” and “after” such corporate actions.

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