What Is a Stock Split?

A stock split is when a company increases the number of its shares by dividing each existing share into multiple new shares. The total value of your investment does not change. Only the number of shares and the per-share price adjust. Example: CAMS 1:5 Stock Split CAMS announced a 1:5 stock split, which means: For every 1 share you currently own, you will now have 5 shares. The share price will be divided by 5. So if CAMS was trading at ₹3,000 before the split: New share price ≈ ₹600 If you had 1 share, now you have 5 shares. Total value remains ₹3,000 (₹600 × 5 shares). Why Companies Do Stock Splits Make the stock more affordable Lower per-share price attracts more retail investors. Increase liquidity More shares in circulation = easier buying/selling. Improve market participation A lower price often results in higher trading volumes. Positive signalling Splits usually happen after a strong rally, signalling management confidence. Important Point A stock split does not change the company’s fundamentals or valuation. It only changes the share count and the price per share — the overall market cap stays the same.