Stock split

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

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

Split and bonus look identical to a shareholder and differ in the accounts. A split reduces face value and leaves share capital unchanged; 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. The action requires a shareholder resolution and an alteration to the capital clause, so it takes weeks rather than days.