Stock Split & Bonus Calculator

Understanding Stock Splits and Bonus Issues

Corporate actions like stock splits and bonus issues are common in the Indian stock market. While they increase the number of shares you hold, they also proportionally reduce the market price per share.

1. Stock Split

A stock split happens when a company divides its existing shares into multiple new shares. The main reason is to improve liquidity and make the stock cheaper for retail investors. For example, in a **1:10 split**, a share with a Face Value of ₹10 is split into 10 shares with a Face Value of ₹1 each. If the market price was ₹5,000, it becomes ₹500.

2. Bonus Issue

In a bonus issue, the company gives extra shares to its existing shareholders for free. This is usually done out of the company's accumulated earnings (reserves). For example, a **1:1 bonus** means you get 1 extra share for every 1 share you already hold. Your total quantity doubles, and the stock price is adjusted (halved) on the ex-date.

Key Dates to Remember

• Record Date: The date on which you must hold the shares in your demat account to be eligible.
• Ex-Date: The date on which the stock price adjusts on the exchange. You must buy the stock *before* the ex-date to receive the benefit.