What is a stock split?

A stock split is a corporate action where a company increases its number of shares by reducing the face value of each share. This is often done to make shares more affordable, increasing liquidity in the market. Despite the reduction in price per share, the total value of your investment stays the same.

When a company splits its shares, the face value of the stock decreases, but the number of shares you own increases proportionally. For instance, if a stock with a face value of ₹10 undergoes a 2:1 split, the face value drops to ₹5. You would now own double the number of shares, but your total investment remains unchanged. The split shares are usually credited within two days.