A stock split divides each existing share into multiple shares, reducing the per-share price proportionally. A 2:1 split turns one ₹500 share into two ₹250 shares. Total market cap and company value remain unchanged.
Split vs [Bonus Issue](/glossary/bonus-issue)
Both increase share count without adding cash. The key accounting difference: a split reduces face value (a ₹10 face-value share becomes ₹5 after a 2:1 split), while a bonus issue capitalises reserves and keeps face value the same.
Why it matters for unlisted shares
Splits improve accessibility — lower per-share prices attract smaller buyers and can increase secondary-market liquidity. For your tax calculation, a split reduces your cost per share proportionally but keeps your total cost base unchanged.
Example: 100 shares at ₹2,000 = ₹2 lakh total cost. After 10:1 split: 1,000 shares at ₹200 adjusted cost. Total cost remains ₹2 lakh — use ₹200 for LTCG calculations, not ₹2,000.