Upcoming Stock Splits

A stock split occurs when a company issues more shares to increase the stock's liquidity. The most typical split ratios are 2-for-1 and 3-for-1 (also referred to as 2:1 and 3:1). Accordingly, each stockholder will receive two or three shares, respectively, for each share they had prior to the split.

The number of stocks that undergo a split in a year can vary depending on market conditions, company strategies, and regulatory approvals. In India, typically 20 to 50 listed companies announce stock splits annually, though this number can be higher or lower based on broader economic trends and investor sentiment.

Companies usually opt for stock splits to improve liquidity and make their shares more affordable for retail investors without changing the overall market capitalisation. You can view the latest and historical list of stock splits on 5paisa to stay updated.

Prior to the stock split record date, the price typically rises due to increased demand, and following the ex-split date, the price declines in accordance with the split ratio and may drop even further if many investors choose to book profits.

Usually, when a stock split is announced, the price of the stock increases. Investors might profit from this in an ideal world, but sadly, trading on knowledge of a stock split before it is publicly disclosed is regarded as insider trading.
 

A stock split has no effect on an investor's equity.
 

A stock split does not affect the company’s fundamentals such as revenue, earnings, or valuation. It only increases the number of outstanding shares while proportionally reducing the stock price, keeping the overall market capitalisation unchanged. The key financials per share, like EPS or book value, adjust accordingly.

Yes, stock splits reduce the per-share price, making it more accessible to retail investors who may have been hesitant to invest at higher prices. This can boost liquidity and trading volumes, although the company’s valuation remains the same.

Often, yes. Companies typically announce stock splits when their share prices have risen significantly, reflecting strong investor demand and market confidence. While not a guarantee of future performance, it’s often viewed as a positive signal by the market.

Yes, splits can lead to higher trading activity due to lower share prices, especially from retail investors. This can temporarily increase volatility, but over time, improved liquidity can lead to more efficient price discovery.