Stock Splits 2021
A Stock Split is a corporate practice in which a Company divides its existing shares into several shares to make the stock appear Affordable to Retail Investors. Shares must be Bought before the Ex-date (T+2 Days before Record Date) to be entitled to receive Additional Shares.
View Upcoming Stock Splits in India (Stock Splits 2021)
|COMPANY NAME||Old Face Value||New Face Value||RECORD DATE|
|HDFC Nifty ETF||761||76||17-01-2021|
|HDFC SENSEX ETF||2504||250||17-01-2021|
|HDFC Gold ETF||100||1||17-01-2021|
How Stock Split Happens?
The Most Common Stock Splits that happen in India are in the Ratio: 1:2, 1:3, 1:5 or 1:10. It basically means that 1 stock of that Particular Company is being Split into 2 shares or 3 Share or 5 Shares depending on the ratio of Stock Split.
For Example, in a 1:3 stock split, Three shares are given for each share held by a shareholder. So, if a company had 10 Thousand Shares outstanding before the split, it will have 30 Thousand Shares outstanding after a 1:3 Stock split.
If a Stock splits into 2 shares. Then on the Ex-date the share’s Market Price will Open at Half Price. If a Stock is Split into three Shares, then on Ex-date it will Open at 1/3rd Price. As the Number of outstanding Shares of the Company increases and the price per share decreases, so the Market capitalization of the Company does not change.
Benefit of Stock Split to Shareholders :
Due to Stock Split, the High priced stocks will be available at much lower rates. The retailer or small investors can easily afford to Buy stocks of low price. So, There is also a probability that after stock split; the stock price may go up as more investors may rush to buy stocks at lower rates.
The Primary Motive of a stock split is to make shares seem more affordable to small investors.
When to Buy a Stock to Get the Benefits of Stock Split?
a) A Company announces a Record Date and Ex-Date.
b) You need to Buy the stock atleast 1 Day Before the Ex-Date to be entitled to Receive the Benefits of Stock Split.
c) If you buy these stocks atleast 2 days before record date then you will be eligible for Stock Splits 2021 (since we follow T+2 system in India)