WHAT IS A STOCK SPLIT?:
This topic reminds me of my childhood days. Let me tell you a story which happened in my past. During my school days, my father used to give ₹20 as pocket money every day to me and my brother.
One day he gave my brother a ₹20 Rupee note and two ₹10 rupee notes to me. My brother asked my father why did he give me more money. My father told my brother, even though there are two notes the value is the same ₹20.
Ok enough of my story. Now come to the present, In the stock market, the stock split is also the same as in the story that I have told. As we saw in the bonus issue, the investment value remains the same, but the units or shares are increased. One thing which is important to note here is that, On the stock split,
- Face Value gets Reduced
- Share Prices Falls
- Market Capitalisation Remains the same.
Let us consider that ITC limited announced a stock split of a 2:1 ratio. Suppose you hold 10 shares of ITC limited at a face value of ₹200 per share. So after the stock split, you will have 20 shares at a face value of ₹100 per share. Now the total investment is the same.
Basically, The stock split increases retail participation and also gives liquidity to the company as well as to the shareholders.
DISCLAIMER:-The content of this site is only for educational purpose. I am not SEBI Registered. The motive of this site is to share my knowledge on share market to new budding investors and others who are learning about stock market
My Kind request to my site viewers, Before taking any decision please do self analysis, consult or discuss with Your financial Advisor .
மறுப்பு:-இந்த தளத்தின் உள்ளடக்கம் கல்வி நோக்கத்திற்காக மட்டுமே. நான் செபியில் பதிவு செய்யப்படவில்லை. இந்த தளத்தின் நோக்கம், பங்குச் சந்தையைப் பற்றிய எனது அறிவை புதிய வளரும் முதலீட்டாளர்கள் மற்றும் பங்குச் சந்தையைப் பற்றி அறிந்துகொள்ளும் மற்றவர்களுக்குப் பகிர்வதாகும்
எனது தள பார்வையாளர்களுக்கு எனது அன்பான வேண்டுகோள், எந்தவொரு முடிவையும் எடுப்பதற்கு முன், சுய பகுப்பாய்வு செய்யுங்கள், ஆலோசனை செய்யுங்கள் அல்லது உங்கள் நிதி ஆலோசகருடன் விவாதிக்கவும்.
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