Split
A stock split is a corporate action in which a company divides its existing shares into multiple new shares. This doesn’t change the overall value of an investor’s holdings, but it does affect the stock’s price per share.
For example, in a 2-for-1 stock split, each existing share is split into two new shares. If you held one share worth Rs.100 before the split, you would now hold two shares, each worth Rs. 50 after the split. The total value of your investment remains the same (Rs.100).
Stock splits are often done to make shares more affordable to a broader range of investors and increase liquidity in the market. They can also be seen as a sign of confidence by a company in its future growth prospects.
It’s important to note that not all companies choose to split their stock, and the specific terms of a stock split (e.g., 2-for-1, 3-for-1, etc.) can vary.