What is a stock split in India?

Quick Answer: A stock split divides each existing share into several shares of a smaller face value. In India it is a sub-division under section 61(1)(d) of the Companies Act, 2013. A 2:1 split turns one ₹10 share into two ₹5 shares, so the share count doubles while each shareholder's stake stays the same.

Stock splits appear regularly in Indian company announcements, usually tied to a board meeting, a shareholder vote and a record date. The arithmetic is simple, but the dates and the derivatives adjustments often confuse people. This guide covers the legal basis, how the record date works, a worked 2:1 example, reverse splits and where split announcements are published.

What is a stock split?

A stock split cuts the face value of a company's shares by dividing each share into two or more smaller shares. Section 61(1)(d) of the Companies Act, 2013 allows it if the articles permit, through a change to the memorandum in a general meeting.

The Act adds one condition. The ratio between the amount paid and any amount unpaid on each new share must match the original share, and for fully paid shares, the normal case on the exchanges, each new share is simply fully paid at the lower face value.

Nothing flows in or out of the company. No money is raised and no reserves are used, and because every shareholder receives new shares in the same ratio, percentage ownership is unchanged. Within 30 days of the alteration, the company must file a notice with the Registrar under section 64, with the altered memorandum.

How do stock splits work in India in 2026?

In India in 2026, a listed company's split runs on a record date that it must announce to the exchanges at least three working days ahead. Regulation 42 of the SEBI LODR Regulations, last amended on 14 July 2026, names splits among the corporate actions that need one.

Neither the day of intimation nor the record date itself counts toward those three working days. Usually the board proposes the split first. A shareholder resolution follows, because the memorandum changes, and only then does the record date notice go to NSE and BSE.

Whoever is on the register at the end of the record date receives the new shares. On NSE's notices the ex-date and record date appear together, and circular NSE/CMTR/73019 of 26 February 2026, issued for a bonus issue, set both on 2 March 2026. With equity trades settling on T+1, shares purchased on that day reach the demat account only after the record date.

What happens to share price and holdings after a 2:1 split?

After a 2:1 split, a shareholder owns twice as many shares, each at half the face value, and the total value is unchanged in theory. The company's worth is simply spread across twice as many shares.

Hypothetical 2:1 split, illustration only, not any real company (adjustment method per NSE; as of 22 September 2026)

Both the ₹800 figure and the 500-share lot are made up to show the arithmetic. No listed company is implied. From the day the split takes effect, the market sets the traded price as it would on any other day.

Open contracts in F&O stocks follow NSE's corporate action adjustment rules. A split in the ratio A:B gets an adjustment factor of A/B. After trading closes on the last cum day, strike prices and the futures base price are divided by that factor, while market lots and positions are multiplied by it.

Stock split vs bonus share: what is the difference?

Face value is the quickest test: a split lowers it, while a bonus under section 63 of the Companies Act keeps it and adds shares funded from reserves.

Section 63 names three permitted sources for a bonus (free reserves, securities premium and capital redemption reserve) and rules out bonus shares in place of a dividend, so a bonus moves money from reserves into share capital. A split leaves both untouched. All it changes is how the same capital is divided.

For a shareholder the result can look alike. A 1:1 bonus and a 2:1 split both double the share count and keep percentage ownership the same. Face value is where they differ, since the split in the table above cuts it while a bonus leaves it at ₹10.

What is a reverse stock split?

A reverse stock split, or consolidation, merges several shares into one of a higher face value, for example five ₹2 shares into one ₹10 share. Section 61(1)(b) of the Companies Act covers it.

Consolidation carries a safeguard that a split lacks. Where it would change shareholders' voting percentages, it cannot take effect without approval from the Tribunal on an application.

NSE applies the same A/B adjustment factor to consolidations. Derivatives therefore move the other way, and in a hypothetical consolidation of five shares into one the factor is 0.2, so market lots shrink to a fifth while strike prices rise five times.

Where do stock splits sit among corporate actions?

SEBI's Regulation 42(1) lists splits among record-date corporate actions, alongside dividends, rights and bonus issues, mergers and demergers.

NSE's derivatives rules sort corporate actions into stock benefits (bonus, rights, splits and consolidations) and cash benefits, meaning dividends. Of the stock benefits, a split is the plainest. A rights issue raises money from shareholders and a buyback returns it. A split does neither.

That is why a split changes the number of shares and the per-share figures, such as price and earnings per share, without changing any shareholder's slice of the company. It is also among the corporate actions covered by Multibagg Alerts, which sends updates on stocks in a watchlist or portfolio.

Where can I see the stock split list for 2026?

Each company's own filing with NSE and BSE, due at least 3 working days before the record date under Regulation 42, is the primary record. Both exchanges publish these filings under their corporate filings and corporate actions sections, showing the ratio, purpose and record date. Multibagg's corporate actions page brings announced splits together with bonuses, dividends and buybacks in one list.

Recent cases are covered in our notes on the BLS E-Services AGM agenda, which included a stock split and the S P Apparels split proposal.

Reading a company's figures across a split

Every per-share figure halves in a 2:1 split. Numbers from before and after the record date therefore need reading together. To line up the two periods for one company, its page in Multibagg's stocks section puts price history beside fundamentals and filings.

Disclaimer: This article is for educational and informational purposes only. Multibagg AI is not a SEBI-registered investment adviser or research analyst, and it does not provide investment, financial, legal or tax advice. Nothing here is a recommendation to buy, sell, hold or invest in any security. Market data is shown as of the dates stated and may have changed since. Please consult a SEBI-registered adviser before making any investment decision.