Generally, we see in the stock market that when a company’s management decides to decrease the value of shares and increased the number of shares it is called a stock split.
Let’s learn with an example:
If you have 10 shares of ABC company ltd and his stock trading at Rs 100. The company announced the stock split in 2 for 1 then, the company will give you 2 shares with a market-adjusted price of Rs 50 for each share you own. Then the total number of shares in your Demat will be 20.
Significance of stock split.
The stock split will increase the liquidity in trading and when stock price decreases it looks more attractive and affordable for retail investors. Trading and investing volume will be significantly increased after the stock split.
Advantages of a stock split.
- When the company announced a stock split it aims to reduce the number of shares.
- Stock split increases the liquidity in stock trading and investing.
- After the stock split stock looks attractive and cheap.
- It’s looking affordable for retail investors.
- There is no negative impact on the stock after the stock split because it’s a part of companies corporate action.
Who is Eligible to Receive a stock split?
All shareholders hold shares in his Demat account before the record date. He will receive the split shares after 3 to 4 days after the record date.
Let’s discuss, Why are the split shares not visible in my holdings, Groww?
We heard from so many Groww users that, after the stock split, the outstanding share are still not credited after the record date.
Generally, when the company announced its stock split the outstanding shares will be credited in your Demat account after 3 to 4 days after record date.
Until the split share is credited to your Groww account. Your holding will be shown as an artificial drop in profit and loss. After crediting your shares in Groww your profit and loss will be restored to their correct value.
If you still have not received your shares after 4 days after the record date. Then, you have raised a ticket in the Groww app and talk to the customer care officer and ask for clarification.
You can raise a ticket in the following way,
Mail id- support@groww.in
Customer care No- +91 9108800604.
You are query will be resolved.
FAQ ( Frequently asked questions)
What is a stock split?
The stock split is a part of companies corporate action which means, decreasing the share price and increasing the number of shares in the market.
Who decided to split a stock?
Companies management decides to split a stock.
When will be split shares be credited in Groww?
The split shares will be credited after 4 to 4 days of the record date.
What do I do if I do not receive split shares?
If you don’t receive the split share after 3 to 4 days then, you have to make a call or mail to grow authority.
Hi, I’m Damini majumder. I’m the author and writer of this blog and share all the information related to Cryptocurrency, Finance, Market forecast, Stock forecast, US and Indian shares through this website. I’m an experienced content writer and aspire to succeed as a content writer in the virtual realm by generating traffic through my immersive content and engaging taglines. Read More