STOCK SPLIT

By: Ravi Shankar Azad09214017

What is Stock Split?

Company Net worth = Rs 8

Stock Split 1:2

WHY STOCK SPLITS?

The prime intention behind the stock split are:

1) To enhance liquidity in the stock.

2) To make the stock more affordable.

Ratio 1:2, 1:3 and 2:3 are most common.

Examples

Company Share price Before Spilt Split Ratio Share Price after Spilt

HDFC Rs 3011.45 1:5 Rs 621.20

ITC Rs 905.80 1:10 Rs 93.50

Ranbaxy Rs 1039.55 1:2 Rs 504.40

Conclusion:

Mostly fundamentals of the company and investors’ sentiments towards the company give direction to the stock price after the split