Stock split

Dividing each share into several, reducing the face value proportionally.

A ₹10 face value share split into two ₹5 shares leaves you with twice as many shares, each worth half as much.

To a shareholder, a split and a bonus look identical. They differ in the accounts. A split reduces face value and leaves share capital unchanged, while a bonus keeps face value and increases share capital by transferring from reserves.

Neither creates value. Both are frequently reported as though they did.

Indian companies split more often than American ones, partly because retail participation is price-sensitive and partly because the regulator's lot-size rules once made high-priced shares awkward to buy. Splitting requires a shareholder resolution and an alteration to the capital clause, so it takes weeks.