Rajesh Sharma

Impact Of Stock Splits On Stock Price And Stock Trading Volume – A Study Of Selected
Companies In India
CH-1 INTRODUCTION TO STOCK SPLITS
D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 1

Companies In India
1) INTRODUCTION:
It is easier to make money during bull markets. In a bull market, all dips are temporary and
going to be corrected any time soon. Since the upward rising of the prices cannot go on
forever, the investors need to sell their stocks when the market reaches its peak. Companies
also tend to split their shares in this phase to make them affordable for small investors.
Stock Split is a corporate financial management decision which does not involve any cash
flows. It involves the conversion of one share of higher par value into certain number shares
of lower par value in a given ratio. Thus stock split involves only an accounting entry in the
books of the company concerned without affecting its assets and liabilities.
Splits are seen as a highly expensive administrative activity without any impact on
organizations’ future earnings. There may be a lot of reasons for stock splits but the primary
motivations behind such splits should be shareholders interest. Whenever stock prices grow
continuously and comparatively trade at high prices, it can be noticed that the firm will
decide on a stock split. The reason for such a split is to keep the price in a range which is
attractive to investors or stock traders.
Forward and reverse are the two types of splits. In case of forward split, a single share is
further divided into multiple shares e.g. 2 for 1 split where 1 share is divided into two shares
thereby shareholders getting two shares for each share owned by them till the record date1 of
split. In case of a reverse split a number of shares are merged together to form a smaller
number of shares e.g. 1 for 2 reverse split where 2 shares are merged into 1 share.
In the recent times stock splits have become very common phenomena throughout the world.
The popularity of the stock splits could be gauged from the fact that the number of stock
splits by the companies has been increasing in almost all advanced countries. In India the
acceptance of stock splits as a strategic financial management tool can be judged from the
fact that more than two dozen companies went for stock splits within one year of the abolition
of par-value concept by Securities and Exchange Board of India (SEBI) in 1999. Some
prominent companies which have gone for stock splits included Infosys Technologies,
Wipro, Zee Telefilms, HDFC, ACC, Polaris Software, Satyam Computers, Hughes Software,
Cummins India, Cybertech International and Abbott Laboratories.

Companies In India
1.1 DEFINITION OF STOCK SPLIT:
American Institute of Certified Public Accountants (AICPA) has defined stock splits as “any
increase in number of shares of a given class without changing of equity amount whereas
increase in number of shares accompanied by increase in total value of that class is called as
stock dividend”.
U.S. Securities and exchange commission defines stock split as “a declaration that has no
effect on the value of what shareholders own. When a company declares a stock split, the
price of the stock will decrease, but the number of shares will increase proportionately”.
1.2 CONCEPT OF STOCK SPLIT:
A stock split is a decision by the company’s board of directors to increase the number of
outstanding shares by issuing more shares to the current shareholders. For example, in a 2-
for-1 split, every shareholder with one share is given an additional share. So, if a company
had 10 million shares outstanding before the split, it will have 20 million shares outstanding
after a 2-for-1 split. The stock’s price is also affected by a stock split. After a stock split, the
stock price will be reduced since the number of outstanding shares has increased. In the
example of a 2-for-1 split, the share price will be halved. Although the number of outstanding
shares and stock prices change, the market capitalization remains constant.

Companies In India
A stock split is a procedure that increases or decreases a corporation’s total number of

outstanding shares without altering the proportionate ownership of existing shareholders. The
balance sheet items remain same except that the total number of outstanding shares of
company increases proportionately to the ratio of split. The most commonly used split ratios
are 2:1, 10:1, 10:2 etc. Stock splits are basically a form of stock distributions that are
typically classified into two main categories:
• Small stock distributions (less than 25%)
• Large stock distributions (greater than 25%).
Gathered from cumulative research over the years, most small stock distributions are
accounted for as stock dividends and large stock distributions are accounted for as stock
splits, but this estimation is not completely valid, especially for large stock distributions.
Managers of corporations have a choice of using their preferred accounting method, but the
firms paying small stock dividends are required by law to account for the distribution by
transferring the value from retained earnings to the contributed capital accounts (common
stock and paid-in capital). However, corporations do choose their own methods in accounting
for the large stock distributions. According to Craig Peterson and James Millar, management
of a corporation may select one of the three different methods in accounting for large stock
distributions: -
 Stock split method - firm proportionately decreases the par value of common stock
and increases the outstanding common shares.
 Retained earnings method - firm transfers the value from retained earnings to the
common stock account.
 Paid-in capital method - firm decreases paid-in capital and increases common stock.
Thus, stock splits are simple paper transactions with high administrative costs and
have no effect on the company’s future earnings.

Companies In India
Types of Stock Splits:
There are different types of stock splits that can have different effects based on the reasons
they are implemented. Some of the concepts to understand about this technique are literal
stock splits, reverse stock splits and dividend payouts: -
1. Literal stock splits:

Because of the existence of reverse splits, it is necessary to differentiate between the
two. For example, a literal stock split occurs when a company announces that it will
do a 2-for-1 split of their common stock. If ABC Industries has 1,000 shares of public
stock at Rs. 50 per share before a 2:1 split, they will have 2,000 shares of public stock
at Rs. 25 per share after.
2. Reverse stock splits:
Reverse stock splits are less common and have a somewhat negative investment
strategy attached to them. If the price of a stock drops too low, many mutual funds
will not purchase them and they even run the risk of being de-listed, or removed from
the market indexes. In addition, the low stock prices create a psychological stigma as
people view them as worthless. By doing a reverse stock split, companies can raise
the stock price by lowering the number of outstanding shares, eliminating the
problems caused by the low stock prices.
3. Dividends pay-outs:
Sometimes a company will choose to avoid a stock split and lower the share prices by
paying a stock dividend to shareholders. The effect of this move is somewhat the
same as a split in that it lowers the share price since the company is worth less after
the pay-out. This can be a good investment philosophy for companies that already
have a large number of available shares plus the move is usually well received by
stockholders, since this is basically investing a portion of the profits back into the
people that have already invested in the company.

Companies In India
1.3 THEORIES OF STOCK SPLITS:
Surveys show that managers justify stock splits on the basis that they improve liquidity and
marketability of the shares. Every year, there are several stock split events taking place and
most board of directors mention the similar reasons as to why they have decided to split their
stock. Also, the empirical researches in corporate finance indicate that the stock splits are a
positive occurrence and that they are indicative of a company’s positive future performance.
Furthermore, empirical research has also documented several negative consequences of the
stock splits, such as increased volatility, larger bid-ask spreads and increased transaction
costs following a stock split.
Two popular theories have been developed in the financial literature to explain why the
stocks behave this way. The signalling hypothesis argues that managers use stock splits to
encourage private investors to gain confidence in the firm’s future, whereas the liquidity
hypothesis argues that managers use stock splits in order to increase trading volume by
bringing the share price down to a more affordable level. The liquidity hypothesis is very
intuitive, but the increase in trading volume does not fully explain the positive price reaction
of the stock on the announcement date. The signalling hypothesis is less intuitive, but it may
provide the explanation for the abnormal returns.
Though several studies have been conducted in the developed economies, testing the impact
of stock split on different market parameters, there has been handful of the studies on the
subject in Indian market. One such study by A. K. Mishra (2006), taking the span of 1999-
2005, concluded a negative effect on the price and return of the stocks. This finding is
contrary to the several other studies in the developed economies, such as U.S., Spain, Canada
etc., where positive relation was established between stock splits and stock returns.
There are several theories which have attempted to explain why, despite creating no value on
paper, stock splits tend to impact the share price and trading volume: -
1.3.1 Signalling Theory:
According to signalling hypothesis, in a scenario of asymmetric information between

managers and investors, managers may use stock splits to signal positive information to the

Companies In India
market about the firm’s future expectations. The rationale is that executives will only proceed
with a stock split if they believe that the firm will do well in the future. Managers obtain
relevant information about the future because of their expertise in making operating and
investment decisions. The signalling theory also states that the investors tend to view a stock
split as a positive signal for the firm’s future prospects and will tend to purchase these shares,
thus creating a rise in the stock price.
Fama, Fisher, Jensen & Roll (1969) theorize that management decides to undertake a split if
it believes that the future dividends of the company will be higher. First formalization of the
signaling theory, however, has been put forward by Grinblatt, Masulis, and Titman (1984) in
their research as a possible explanation of the excess returns observed around split
announcement and split ex-dates. The study hypothesize that a management team with
preference for a specific price range for its stock may choose the timing of a stock split in
order to reveal private managerial information regarding future stock returns.
The presence of positive abnormal returns around the stock split announcement in many
empirical studies, (Asquith, Healey and Palepu, 1989; Ikenberry and Ramnath, 1996;
Mukherji, Kim and Walker, 1997), provides evidence for the signaling hypothesis.
1.3.2 Optimal Trading Range Theory:
According to the optimal trading range theory, stock splits are used as a tool to realign the
share price to a desired price range so that it is more affordable for the small investors to buy
round lots of shares. This states that the investors, either consciously or subconsciously, seek
out stocks that trade within a certain range. If a stock passes the upper limit of this range,
many times the company will declare a stock split to once again bring down the share price to
the ‘optimal’ range. This optimal trading range is largely psychological, as investors with
limited amount of investment funds would prefer to receive more shares than fewer, even
though the amount invested would be the same.
The idea is widely supported by the practitioners that stock splits are intended to keep the
price of shares within some “optimal trading range”. Specifically, small investors are
penalized by high stock prices that deny them the economies of buying stocks in round lots.
On the other hand, wealthy investors and institutions will save brokerage costs if securities

Companies In India
are priced high because of the fixed per share transaction cost. Therefore, the argument that
there exists an optimal price range that equilibrates the preferences of these classes of
investors holds. Managers interested in a broad and heterogeneous stockholder base may
strive to adjust stock prices to such an optimum range by splitting their stock or distributing
stock dividends.
A survey of manager’s motives for stock splits conducted by Mehta, Yadav and Jain (2011)
revealed that 98.5 percent of the respondents indicated that splitsmake it easier for small
investors to purchase round lots, and 88.2 percent believed that splits keep a firm’s stock
price in an optimal range and increase the number of stockholders.
1.3.3 Self Serving Management and Dispersion of Control Theory:
A possible explanation for stock splits claims that a self-serving management prefers a
diffused ownership since small investors cannot exercise much control over the company and
a stock split would likely achieve this.
However, on the contrary studies done by experts [Maloney &Mulherin (1992) and Baker &
Powell (1993)] show that management dispersion hypothesis does not hold. Their results
show that stock splits accompany increases in institutional ownership for firms. It seems that
the shareholder base of a company subsequent to a split expands, yet the theory of self-
serving management that aims to reduce overall institutional ownership does not hold as the
empirical results disprove this theory. The evidence against this theory is too strong. By stock
splits management reaches the goal of “more diversified” clientele, yet this does not mean
that the splitting firms end up with a more diffused shareholder base.
1.3.4 Increased Liquidity Theory:
One of the most prominent theories regarding stocks splits is that these are positive actions.
In spite of the fact that the investors do not make money from stock splits, an equally
prominent theory regarding stock splits is that companies employ this tactic to enhance
liquidity. The empirical research conducted on stock splits also shows that the companies
split their stock to achieve greater liquidity. In the liquidity enhancement theory, the
assumption is that companies with shares that trade close to or well into triple digits become
inaccessible for many investors. As only fewer investors are participating in the company, the

Companies In India
more constrained liquidity can become, so some companies will engineer a stock split to
boost liquidity.
Past literature has attempted to measure changes in liquidity around stock splits by analyzing
the changes in some parameters, such as trading volume, relative bid-ask spread, number of
shares traded and number of trades, from presplit period to post split period. The evidence for
the liquidity hypothesis is mixed. Muscarella and Vetsuypens (1996); Desai, Nimalendran
and Venkataraman (1998); Menendez and Gomez-Anson (2003) observed an increase in
trading volume during the post-split period, and hence provide support for the liquidity
hypothesis of stock splits. On theother side, Conroy, Harris and Benet (1990); Ferris, Hwang
and Sarin (1995) indicated that the corporate liquidity decreases rather than increases after
the execution of split.
After analysing the above theories it can be concluded that the following points best explains
the results of stock splits –
a) Signal: Management team of an exceptionally well performing company with private

information regarding the future performance of their firm decides to split the company’s
shares. This signal has its own benefits and costs.
• The benefits of the signal are –
o This signal may benefit the firm if it is accompanied with an

announcement that declares futures dividends will be larger, or that the
company, if it was not paying dividends up to that point, will initiate
giving dividends.
o The firm may be benefitted from the signal if the company went through
a previous split event. The market would expect the company’s stock to
split to the post-split price level of the previous split event. If the split
factor is bigger than this expected level future expected returns are even
higher.
 The signal is costly to the firm. There are two cost components:
o Relative bid-ask spread increases due to the split and this results in
higher order processing costs, which in turn reduces liquidity.

Companies In India
o Pre-split shareholders incur higher aggregate costs resulting from per

share based commission costs.
b) Promotion: After splitting the shares, the number of outstanding shares increased which
leads to increase in per share based commissions and order processing costs. Following the
split, the market-maker has a lot to gain from increased trading. As a result market maker
heavily promotes the stock split to add new clientele.
c) Enlarged Clientele Base: With more coverage prospective shareholder buys the stock,
based on the management team’s signal and the market maker’s information dissemination in
order to reap the benefits of excess returns surrounding split announcement and split ex-dates.
Prospective shareholders expect that these excess returns will not be negated in the year
subsequent to the split ex-date.
Furthermore prospect further diversifies their portfolio with non-negative long-run excess
returns. Prospect can be a small investor or an institutional investor, but in most likelihood, is
a small investor.
d) Increased Number of Trades: The Company’s shareholder base is enlarged;

management has more diversified clientele making their jobs more secure. Furthermore the
management has solidified the gains of the exceptional return period with this new clientele
base. Shareholders earn excess returns around the announcement and ex-dates and this return
will continue for longer periods. At the same time the number of small shareholders increases
so does the number of small trades and aggregate number of trades.
However, due to the increase in number of trades stock return volatility also goes up around
the stock split event. As the split is costly, this signal has value over the year following the
split thus the number of trades in the subsequent year doesn’t decrease.

Companies In India
1.4 MOTIVATION FOR STOCK SPLIT:
Stock splits do not involve any cash inflow or outflow either from companies or from their
shareholders. While the number of shares held by shareholders would increase, the par value
of the shares would decrease proportionately. The total par value of the shares held by a
shareholder remains the same as before the stock split. Therefore the shareholders, who are
concerned with the firm’s cash flows and the portion of cash flows to which they are entitled,
are not expected to be influenced by stock split decisions as their position is the same as at
previous level even after splitting of stock.
Despite these theoretical aspects, a company’s stock split announcement has been observed to
be a net positive impact event. After a split, new investors might be interested in buying the
stock as it is available at a lower price, in the hope that they would stand to gain . Do such
investors actually end up gaining? A stock split may have no impact on the value of the
investment if the fundamentals of the company remain the same. However, one would expect
the market forces of demand and supply to determine the true price for the share as the
liquidity increases and more floating shares become available after the split. The price
performance of the share depends on the state of the market in addition to the fundamentals
of the company.
Stock splits do not have any tax advantage or disadvantages to the companies or its
shareholders. There is no change in the rights of a shareholder in any way vis-a-vis that of the
company. Theoretically there is neither any gain nor any or loss arising to the shareholders
on account of stock splits. They continue to hold the same capital asset, but in a modified
form. However shareholder might gain on account of increase in the market value of the
shares due to increase in the frequency of trading.
Considering the fact that Stock splits do not have any cash flow or tax implications one may
wonder as to what are the motivations for the stock splits. One reason for stock splits could
be the signalling effect. As per the signalling hypothesis, the declaration of a stock split
conveys favourable private information about the future of the company and the earnings to
the investors. Managers of a company have superior information about its future earnings.

Companies In India
Managers, by declaring stock split, provide favourable signal to the investors regarding their
confidence in the company’s future earnings and operations.
The announcement of a stock split by a company can signify that it has attained a certain
level of success which is going to be continued in future also. The fact that a company has a
record of multiple stock splits usually indicates that the company is among one of the faster
growing firms, since their stock has been split numerous times. Companies such as Pfizer
Ltd., Alembic Ltd., Cipla Ltd., Crompton Greaves Ltd., Jaipan Industries ltd. are few
examples that have split more than once.
Stock splits are resorted to by a company when its stock price has risen to a very high level
and thus becoming out of the popular trading range. It results into reduction in the stock
prices. Reduction in stock prices, make them more affordable to small investors. Therefore, a
stock split is used to place a stock in a lower, more popular trading range.
Stock splits also result into wider market for the company. As the number of shares increases
after stock split, it leads to greater number of transactions leading to a wider market. Through
Stock splits, the companies by reducing the par value of their shares make them comparable
with other firms in the industry.
Another explanation for stock splits could be the desire of the companies to bring liquidity
and stability to their stock prices. These small investors are good for market stability.
Companies hold the view that greater liquidity for stocks may arise in lower price range.
Desire of the management of a company to have diffused ownership can be another reason
for stock splits. Small investors cannot exercise much control over the affairs of a company
because of their insignificant shareholding. This can help the management in the retention of
control in its own hands and carry on the operations of the company without interference.
Another reason that may motivate a company for splitting its stock could be that stock split
can be used as a defense to a potential hostile takeover. Since stock splits results into greater
number of shares in circulation thus making their acquisition more difficult.

Companies In India
Motivations for some of the Indian Companies who had gone for Stock Split:
Yes Bank: In order to facilitate affordability of the company’s shares for investors at large
and to enhance the liquidity of the company’s equity shares in the stock market, the most of
companies proposed to bring down the nominal face value of equity shares.
(Source:http://www.business-standard.com)
Can FinHomes:High price of the equity shares has kept small retail investors away from
trading in company's equity shares, Can Fin Homes said in a regulatory filing. Besides, there
was a request from shareholders for stock split in recent years, they added. “In order to
improve the liquidity of the company's equity shares in the stock market with higher floating
stock in absolute number and to encourage the participation of small investors by making the
equity shares of the company affordable," they said.The Board of Directors have approved
stock split of the company's equity shares with face value of Rs 10 each into ten equity shares
of face value of Rs 1 each to make it affordable for small investors to participate in the
company’s growth story.(Source: https://www.thehindubusinessline.com)
Sunteck Realty: Sunteck Realty sub-divided the shares to face value of Re 1 each in order to
make it affordable for small investors.(Source:http://www.moneycontrol.com)
Trent Ltd:The rationale for the stock split was to improve liquidity of the shares in the
market and make the shares more affordable to small investors. (Source:www.business-
standard.com)
Bharat Electronics: Defence PSU Bharat Electronicsstated that they split its shares in the
ratio of 1:10, to make the scrip more affordable to investors and increase market liquidity.
(Source:http://www.moneycontrol.com).
Infibeam Incorporation: The board of e-commerce firm Infibeam Incorporation approved

share split plan in the ratio of 1:10 to make its scrip more affordable for the investors and
increase market liquidity.(Source:https://economictimes.indiatimes.com)
NBCC: State-run NBCC stated its board approved splitting of company's equity share of
face value of Rs 10 each into five shares of Rs 2 face value each to make its shares more
affordable as well as increasing market liquidity.(Source:http://www.business-standard.com)

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Kajaria Ceramic: The primary motive of the stock-split proposal is to improve the

liquidity in company's shares in the secondary equity market and to make the shares more
affordable to small investors. (Source:https://www.indiainfoline.com)
Cadila Health: To increase liquidity in the stock and attract more retail investors to invest in
the stock, who were otherwise not investing in the stock on account of its high per share
value. (Source:http://profit.ndtv.com)
Titagarh: The Company decided to split its stock in order to make its shares more affordable
to small investors. (Source:http://www.business-standard.com)
Granules India: Stock split or sub-division of equity shares was done to infuse liquidity and
to make shares affordable for retail investors who could not invest earlier because of the high
stock price.(Source:http://www.business-standard.com)’
Tech Mahindra:The Board approved the issuance of bonus shares and Stock Split in order
to increase the liquidity of its shares. (Source:https://www.indiainfoline.com)

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1.5INDIAN SCENARIO:
In India stock splits came into existence after Securities and Exchange Board of India (SEBI)
abolished the par value of shares in 1999, provided the shares are dematerialized and face
value after split does not reduce below Re. 1. Prior to that, corporate action relating to
existing shares was related to mainly dividends, rights issues and bonus issues. Prior to 1999
there were no stock splits by Indian companies and corporate actions relating to existing
shares were related to mainly paying dividends and issuing right and bonus shares.
Initially the Indian companies which resorted to stock splits subdivided the par value of their
shares from Rs.100 to 10 shares of Rs. 10 each. However, afterwards some companies issued
10 shares of Re 1 each, or five shares of Rs 2 each, or two shares of Rs 5 each for one share
of Rs 10, representing different split factors.
The first company to split its stock in India was Infosys from Rs 10 a share to Rs 5 per share.
The idea behind the split was to increase liquidity in the stock, thereby reducing volatility and
also making it more affordable to retail investors. Prior to the split in Infosys, the scrip had
touched a high of Rs 17,000 per share during the boom phase in the market during 2000. The
action of Infosys was followed by ACC, WIPRO, Zee and others. ACC split its shares from
Rs 100 a share to Rs 10 per share. Zee and Wipro split their shares to bring down their face
value to Re 1 and Rs 2 per share respectively after split.
Table 1.1: A Few initial Stock Splits in India along with split ratio
Company Ratio
ACC 10:1
HDFC 10:1
HLL 10:1
Hughes Software 2:1
Infosys 2:1
Polaris 2:1
Satyam 5:1

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Sonata Software 10:1

Wipro 5:1
Zee 10:1
(Source: Stock Splits in India by AnubhaVashisht)
Some companies including Pfizer Ltd., Alembic Ltd., Cipla Ltd., Crompton Greaves Ltd.,
Jaipan Industries Ltd. had a record of multiple stock splits. While splitting was in accordance
with the provisions of the SEBI circular, it was observed that frequent splitting of shares
within a short span of time had created various problems. Some of these problems can be
summarized as below:
 Stock splits created confusion amongst the investors as to whether the market price of
the shares is based on the pre-split or post-split par value.
 It became difficult to analyze and compare the movement of share prices of
companies resorting to stock splits vis-à-vis those of other companies in similar
industry.
 Since dividend is declared as a percentage of the face value of the shares of the
company, frequent changes of the value of the shares by way of split resulted in
confusion among the investors regarding dividend rate.
 It also created confusion in the calculation of rate of return earned on the company.
Table 1.2 shows stock split activity during 1999-2015. Prior to 1999, Indian companies
would subdivide the par value per share from Rs.100 to Rs. 10 and considered it as a stock
split.

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Table 1.2: Number of Stock Splits during 1999-2017
Year Number of Stock Splits

Before 1999 65
1999 04
2000 32
2001 29
2002 29
2003 35
2004 43
2005 148
2006 80
2007 34
2008 89
2009 71
2010 120
2011 83
2012 60
2013 69
2014 73
2015 90
2016 76
2017 72
Total 1302

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Chart 1.1: Representing the no of stock splits during 1999-2017
No Of Stock Splits
No Of Stock Splits
148
120
89 90
80 83
71 73 76 72
65 69
60
43
32 35 34
29 29
9 99 99 0 0 00 1 00 2 003 004 005 006 007 008 009 010 011 012 013 014 01 5 01 6 01 7
e1 19 20 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
r
fo
Be

Companies In India
1.6REGULATORY FRAMEWORK OF STOCK SPLITS IN INDIA:
A Secondary Market Advisory Committee (SMAC) was formed by SEBI under the
leadership of Dr. R. H. Patil to fill the loopholes in the existing structure. This committee has
to advice on the matters related to Indian stock market. The committee has deliberated on the
following issues: -
o Frequent change of face value of shares by listed companies

o Frequent change of names by listed companies.
The meeting of committee held on October 9, 2003 discussed with many other things,
the issue of frequent changes in face value of shares by listed companies viasplitting
or consolidation and recommended modifications in the provisions of SEBI which
was declared on June 14, 1999.
Background:
1. The equity shares of listed companies were originally required to be offered to the public
in uniform denomination of nominal value of Rs.10/-. This nominal value of Rs.10/- was
referred to as par value of shares and provided benchmark for determining premium and
discounts. The Ministry of Finance, vide Circular No. 1/7/SE/81 dated Jan 22, 1983, had
stipulated that equity shares which are in denominations other than those of Rs. 10/- or Rs.
100/- should be converted into Rs.10/- or Rs.100/- before Dec 31, 1983.
2. In 1999, it was decided to do away with the concept of fixed par value of Rs. 10/- and give
freedom to the companies to issue shares in denomination, to be determined by them in
accordance with the provisions of the Companies Act, 1956. The consideration behind the
decision was as follows: -
o It was felt that in many cases, the net worth of the companies did not justify the
minimum face value of Rs. 10/- and with a subsequent decline in the stock prices of
the company, the investors had to suffer a loss.

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o The dispensing with the par value concept of shares and giving the companies an
option to fix the minimum face value for their equity shares would enable valuation
of companies by their real net worth.
o The investors also would be benefited as they would not be forced to pay an
artificially higher price for the shares.
o Such a measure would help increase the investor base and thus deepen the market.
3. Accordingly, SEBI vide circular no. SMDRP/Policy/Cir-16/99 dated June 14, 1999,
modified the Central Govt. circular no. 1/7/SE/81 dated January 22, 1983, and provided for
the following: -
o The companies were given the freedom to issue the shares in any denomination to be
determined by them in accordance with Section 13(4) of the Companies Act, 1956.
However, these shares would not be issued in decimal of a rupee.
o The companies which seek to change the standard denomination may do so after
amending the Memorandum and Articles of Association.
o The existing companies which have issued Rs. 10/- or Rs. 100/- may also change the
Standarddenomination into any denomination other than decimal of a rupee by
splitting or consolidating the existing shares after amending their Memorandum and
Articles of Association.
o Only those companies whose shares are dematerialized shall be eligible to alter the
standard denomination.
It has since been observed that many companies thereafter have split the face value of
their shares. While this splitting is in accordance with the provisions of the circular, it
was observed that several companies were resorting to frequent splitting and
consolidation, within a short span of time. Such frequent changes have caused
confusion amongst the investors as to whether the market price of the shares is based
on the pre-split or post-split or post-consolidation. The analysis and comparison of
the movement of share prices of such companies with those of other companies in the
similar sector, becomes difficult. Further, as dividend is also declared as a percentage
of face value of the shares of company, frequent changes of the face value of shares
by way of stock split and consolidation results in the investors being often misled by

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a high dividend rate and also creates confusion in the calculation of return/payout
from the company.
The practice of frequent splitting and subsequent consolidation of the face value of
shares is not a healthy practice and runs contrary to the spirit of the circular. Rather
than being a facilitating measure to help the investors and increase the depth of the
market, such splitting goes against the interest of the investors.
Recommendations:
The following modifications in the provisions are recommended: -
a) The listed company with an average market price of less than Rs. 500 per share in
the previous six months is not allowed to split its shares.
b) If the company has gone in for split or consolidation, it would not be permitted for
a repeat split or consolidation of its shares within a period of three years from the
date of the last split/consolidation.
c) The information of split or consolidation, as the case may be, will have to be
circulated through the websites of stock exchanges and through Electronic Data
Information Filing and Retrieval System (EDIFAR) for a period of one year, from the
date of split or consolidation.
d) Only issues of Rs. 500 or more can fix face value of shares at below Rs. 10,
subject to a floor of Rs. 1 per share. For issues with a share price below Rs. 500, the
face value of a share has to be Rs. 10.
e) These conditions should be in addition to the provisions of SEBI Circular dated
June 14, 1999 referred above.
SEBI has also decided to do away with the current system relating to minimum
application size and tradable lot. Instead of the quantity of shares, the application size
and tradable lot will now be in terms of value. The minimum application size should
be within the range of Rs 5,000-7,000 or in multiples of that value.
Recommendations of the committee are no doubt, a welcome step for protecting the
interest of investors.

Companies In India
1.7 PROCEDURAL ASPECTS:
A stock split is done by the prior approval of board of directors. The Shareholders approval
for conducting a stock split is generally not necessary. The timeline of a stock split consists
of four main dates –
Announcement date, Record date, Payment date and Ex-split date
The day on which board of directors of the company decides and announces to split the
common stock of company is called announcement day. The announcement date is important
because no one knows for sure if and when a company will declare a split of their company’s
stock. Thus, investors speculate on whether the company will announce and when they will
announce. The payment date is crucial as well because this is the day before the company
actually splits its share price, after this day investor’s activity changes as the new share price
targets a different audience. The day on which stock splits brought into effect is termed as the
ex-split date.
1.7.1 Steps to Be Followed for Conducting a Stock Split
• The prior approval from board of directors and shareholders has to be obtained before
executing a stock split.
• After getting the approval, the company calls for the book closure.
• The company announces for stock split after completing the legal and procedural
formalities and thereafter notifies the stock exchange about the record date.

Companies In India
• The stock exchange accordingly fixes the ex-dates, which generally comes few days earlier
the record date.
• On the ex-date and thereafter, the only market is in the post-split shares.
1.7.2 Parties Affected by Stock Split Decisions
A stock-split decision concerns four major parties. These are the following: -
• The Board of Directors (in some cases the management team) of the splitting firm
(Decision-maker, possible beneficiary)
• Existing shareholders of the splitting firm (pre-split)
• Market makers (possible beneficiary and the intermediary between the management and
Prospective shareholders)
• Prospective shareholders of the splitting firm (post-split or post announcement)
1.8WHY DO COMPANIES GO FOR STOCK SPLIT?

The main motive behind stock splits is to maximize shareholders wealth. There have been
numerous empirical studies covering diverse aspects of a stock split. The splitting company’s
stock price has been seen to react differently through the stages of the split life-cycle, starting
from the event announcement date to the record date, and even beyond. Scholars believe that
stock split announcements are a signal of the management’s optimism about the company’s
future earnings; firms use the positive reaction to the split announcement to raise more funds
at a higher price after the split and can boost liquidity.
1) Availability and Affordability:

Stock splits allow a wider number of people to own shares. Each share has half the
value it did before the stock splits. Someone who would not buy a share that cost
more might buy a share after split therefore the universe of potential buyers of shares
of a company will increase as shares are now affordable to investors.
2) Psychological Effect:
Stock splits help the companies to keep prices of its shares in comfortable zone. It
gives existing shareholders the feeling that they have more shares on account of stock

Companies In India
split than they did before, and of course, if the price rises, they have more shares to
trade. The lower share price may also be used to attract new investors.
3) Increases Liquidity:
Stock splits also increases the liquidity for shares of the company because after stock
split number of shares which are there in open market increases and It leads to better
price discovery because liquidity plays a key role when it comes to discovery of
correct price in market.
4) Performance Indicator:
The announcement of a stock split can be a positive indicator that the stock has
attained a certain level of success. The fact that a company has a record of multiple
stock splits usually signifies that the company is among one of the faster growing
firms, since their stock has been split numerous times.
5) Increase in Market Price of Shares:
A stock split is often seen as a positive indicator that a company is growing.
Companies that split their stocks have typically enjoyed a big jump in share prices.
However, just because a company declares a stock split, it does not mean that the
stock price will inevitably rise in reaction. There are many other variables that
influence investor’s decisions in the result of a stock split including economic reports,
market stability, earnings, interest rates, external conflicts, etc.
1.9 LIMITATIONS OF STOCK SPLITS:
1)Costly affairs:
Stock split is not a cost free activity for the company. It involves heavy expenditure for
meeting legal and listing exchange requirement after stock split. Written notification letters
and mailing them out to all shareholders about date and effects of stock splits becomes costly
for companies with a large number of shareholders.
2) Impulsive selling of share:

Companies In India
Stock splits may lead to impulsive selling of shares signalling poor financial state of the
company. As share decline on account of stock splits, investors may perceive the value of
shares being on the declining path. They also tend to associate a lower price with
unsuccessful company management and bleak future prospects. Once share prices drop after
a split, more impulsive selling may take place which can show the company in poor light.
3) Risk of Low share Prices:
Normally, companies announce their split decision when they are performing better and
share price is on the rise. However, an overly aggressive split may lead to some risks if the
share price falls too much going forward. If the economy and company fall on hard times,
the share price also drops. This can make share less attractive to large investors.
4) Listing Requirements:
To be listed on a stock exchange stocks must maintain a certain minimum price per share. If a
company splits its stock and then value of company itself falls, the shares may fall below this
requirement and can be delisted from stock exchange.
5) Record-keeping Challenges:
Stock splits create record-keeping challenges for company accountants, analysts and
shareholders. When you split a stock, the chart would naturally reflect the quick drop in share
price. This doesn't offer a fair valuation of company stock. Advanced software tools make it
easier for companies and investors to show split results on charts.
1.10MAJOR STOCK SPLITS IN INDIA:
 In year 2014,State Bank of India had split the face value of its shares from Rs 10 to
Rs 1 in 2014.The share has been quoting on an ex-split basis from November 20,
2014.
 Tech Mahindra, Tata Coffee, Corporation Bank and Bank of Baroda are among
notable stocks that declined 6%-34% after sub-division of shares. TechM split its
shares at Rs 2,890, Tata Coffee at Rs 1,023 and Bank and Bank of Baroda at Rs 899
in 2014.

Companies In India
 Ajanta Pharma, Granules India, JMT Auto, Rollatainers and Rasi Electrodes are
some shares that have rallied more than 20% post stock split in 2014.
 In 2014, Signet Industries also sub-divided the equity shares in the ratio of 10:1 i.e.
ten equity shares of Re 1 each for every one equity share of Rs 10 each held. This
company has zoomed nearly 200% thus far in 2015 from Rs 12.85 to Rs 38
(adjusted to stock split) on the BSE.
 Cadila Healthcare shares jumped as much as 6 per cent after the company
announced a stock split in 2014. Company’s consolidated net profit increased 47 per
cent annually to Rs 353 crore, while its revenues registered an annual growth of 22
per cent to Rs 2,501 crores.
 Cadila Healthcare and Associated Stone Industries (Kotah) sub-divided equity
shares of their companies from Rs 5 toRs 1in year 2014. NatcoPharma split the face
value of its equity shares from Rs 10 to Rs 2, Sarla Performance Fibres from Rs 10
to Re 1 and Shilpa Medicare from Rs 2 into Re 1.
 In year 2015, five companies - Cadila Healthcare, NatcoPharma and Shilpa
Medicare –and Sarla Performance Fibers and Associate Stone Industries (Kotah)
resorted to stock split as their equity shares as were quoting at multi-year highs.
 50 companies including Bata India, NatcoPharma and Titagarh Wagons went for
stock splits during tough financial year in 2015-2016, which saw BSE benchmark
Sensex trade in a broad range between sub-23,000 and 29,000 levels amid its
struggles with weak domestic and global developments. The list of stock splits in
2016 included six textiles companies, 5 drug makers, 5 engineering companies and
4 auto and auto ancillary companies.
 Among the 50 companies, stocks of 28 firms delivered anywhere between 11
percent and 590 per cent returns on an adjusted basis. The rest 22 stocks fell
anywhere between 2 percent and 74 per cent of their market values.
 Precision Wires India and Welspun India were the last two stock splits of FY 2016.
The stock delivered 16.60 per cent return during financial year.
 Shares of ChamanLalSetia Exports, Signet Industries, Alankit, Menon Bearings and
Stampede Capital, which went for stock splits, jumped between 100 per cent and
300 oer cent during financial year.

Companies In India
 Tide Water Oil, whose price was Rs 33,200 in January 2016, went for stock split
(From FV Rs 10 to FV Rs 5) as well as bonus issue (1:1) in March.
 Cadila Healthcare was more than Rs 2,100 when the stock was split into five in
October, 2015. SMS Pharmaceuticals, Sequent Scientific, NatcoPharma and Shilpa
Medicare were the other stocks that were split during FY 2016. Shilpa Medicare and
NatcoPharma fell 13 percent and 2 per cent respectively. The other two pharma
companies stock gained between 40 per cent and 60 per cent.
 Welspun India, Lambodhara Textiles, Bhandari Hosiery Exports, Indian Terrain
Fashions, Samtex Fashions and Sarla Performance Fibres were among six textiles
companies which went for split. The stock gained between 11 per cent and 180 per
cent for the financial year 2016.
(shodhganga.inflibnet.ac.in/bitstream/10603/100922/6/06_chapter%201.pdf)

Companies In India
CH-2 Company Profile
ACC Limited (Formerly The Associated Cement Companies Limited) is one of the largest

producers of cement in India. It is a subsidiary of LafargeHolcim. On 1 September 2006, the
name of The Associated Cement Companies Limited was changed to ACC Limited. Acc Limited
had been established in Mumbai, Maharashtra on 1 August 1936.
In 1936, eleven cement companies belonging to Tatas, Khataus, Killick Nixon and F E

Dinshaw groups merged to form a single entity, The Associated Cement Companies. Sir Nowroji
B Saklatvala was the first chairman of ACC. The first board of directors had some prominent
industrialists—J R D Tata, Ambalal Sarabhai, Walchand Hirachand, Dharamsey Khatau, Sir
Akbar Hydari, Nawab Salar Jung Bahadur and Sir Homy Mody.
HDFC Bank Limited is an Indian banking and financial services company, headquartered in
Mumbai, Maharashtra. HDFC Bank is India’s largest private sector bank by assets and by market
capitalisation as of April 2021. It is the third largest company by market capitalisation on the
Indian stock exchanges. It is also the thirteenth largest employer in India with nearly 120,000
employees.
HDFC Bank was incorporated in 1994 as a subsidiary of the Housing Development Finance
Corporation, with its registered office in Mumbai, Maharashtra, India. Its first corporate office and
a full-service branch at Sandoz House, Worli were inaugurated by the Union Finance
Minister, Manmohan Singh. As of 30 June 2019, the Bank's distribution network was at 5,500
branches across 2,764 cities. The bank also installed 430,000 POS terminals and issued
23,570,000 debit cards and 12 million credit cards in FY 2017. It has a base of 1,16,971
permanent employees as of 21 March 2020.
HLL Lifecare Limited is a Union Govt company, incorporated on 01 Mar, 1966. It's a public
unlisted company and is classified as company limited by shares'.
Company's authorized capital stands at Rs 30000.0 lakhs and has 96.805% paid-up capital
which is Rs 29041.5 lakhs. HLL Life care Limited last annual general meet (AGM) happened on
28 Sep, 2017. The company last updated its financials on 31 Mar, 2017 as per Ministry of
Corporate Affairs (MCA).
HLL Life care Limited is majorly in Manufacturing (Metals & Chemicals, and products thereof)
business from last 55 years and currently, company operations are active. Current board

Companies In India
members & directors are RAKESH KUMAR VATS, LAV AGARWAL, SANJIV KAPOOR, BABU
THOMAS, RAKESH PRASAD KHANDELWAL, DHARITRI PANDA, AARTI VIJ, ELAMTHURTHI
ACHUTHAN SUBRAMANIAN, VIJAYA SRIVASTAVA and RAJASEKAR TIMOTHY .
Company is registered in ROC-Ernakulam (Kerala) Registrar Office. HLL Lifecare Limited

registered address is HLL Bhavan Mahilamandiram Road, Poojappura Thiruvananthapuram KL
695012 IN.
Hughes Software Systems (HSS) is a subsidiary of Hughes Network Systems (HNS), a

unit of Hughes Electronics Corporation. With annual revenues of $1.4 bn, the US-based
HNS is the world's largest broadband satellite network solutions provider. It has over
4,00,000 systems installed in more than 85 countries.
It supplies a broad range of communications-related software services, products, and

solutions to leading telecommunication companies and application developers around
the wo-rld. The companies using solutions from HSS include Alcatel, ADC, Cisco,
Ericsson, Lucent, Nokia, Huawei, Sylantron Sha-nghai Bell, SK telecom etc.
Infosys Limited is an Indian multinational information technology company that

provides business consulting, information technology and outsourcing services. The company is
headquartered in Bangalore.[5] Infosys is the second-largest Indian IT company after Tata
Consultancy Services by 2020 revenue figures and the 602nd largest public company in the
world according to Forbes Global 2000 ranking.[6] On 31 December 2020, its market
capitalisation was $71.92 billion.[7] The credit rating of the company is A− (rating by Standard &
Poor's).[8]
Infosys was founded by seven engineers in Pune, Maharashtra, India with an initial capital of

$250 in 1981.[9] It was registered as Infosys Consultants Private Limited on 2 July 1981.[10] In
1983, it relocated its office to Bangalore, Karnataka, India.
The company changed its name to Infosys Technologies Private Limited in April 1992 and
to Infosys Technologies Limited when it became a public limited company in June 1992. It was
later renamed to Infosys Limited in June 2011.[11]
An initial public offering (IPO) was floated in February 1993 with an offer price of ₹95 (equivalent
to ₹550 or US$7.80 in 2019) per share against a book value of ₹20 (equivalent to ₹120 or
US$1.60 in 2019) per share. The IPO was undersubscribed but it was "bailed out" by US
investment bank Morgan Stanley, which picked up a 13% equity stake at the offer price.[12] Its
shares were listed in June 1993 with trading opening at ₹145 (equivalent to ₹850 or US$12 in
2019)per share.
Polaris Inc. is an American manufacturer of motorcycles, snowmobiles, ATV, and neighborhood
electric vehicles. Polaris was founded in Roseau, Minnesota, where it still has engineering and
manufacturing. The company's corporate headquarters is in Medina, Minnesota. The company
manufactured motorcycles through its Victory Motorcycles subsidiary until January 2017, and

Companies In India
currently produces motorcycles through the Indian Motorcycle subsidiary,which it purchased in

April 2011. Polaris produced personal watercraft from 1994–2004. The company was originally
named Polaris Industries Inc. and was renamed in 2019 to Polaris Inc.
Satyam Computer Services Limited is a global consulting and IT services company, offering a wide array
of solutions, from strategy consulting right through to implementing IT solutions for customers. Satyam
offers a range of expertise aimed at helping customers re-engineer and re-invent their businesses to
compete successfully in an ever-changing marketplace.
Sonata Software Limited is a Global IT Services company, that provides services in business
intelligence and analytics, application development management (ADM), mobility, cloud, social
media, testing, enterprise services (ERP and CRM), and infrastructure management services. It
is headquartered in Bangalore, India.
Founded in 1986 as the IT division of Indian Organic Chemicals, the company spun off as an
independent entity in 1994. The company became a public company in 1998. In 2001, the
company obtained SEI-CMMI Level 5 certification and in the following years, set up offices in the
US, Europe and Asia Pacific.
Wipro Limited is an Indian multinational corporation that provides information technology,
consulting and business process services. It is headquartered in Bangalore, Karnataka, India.[4] In
2013, Wipro separated its non-IT businesses and formed the privately owned Wipro Enterprises
The company was incorporated on 29 December 1945 in Amalner, Maharashtra by Mohamed
Premji as "Western India Palm Refined Oil Limited", later abbreviated to "Wipro". It was initially
set up as a manufacturer of vegetable and refined oils in Amalner, Maharashtra, British India,
under the trade names of Kisan, Sunflower, and Camel.[6][7][8]
Zee Entertainment Enterprises (formerly Zee Telefilms) is an Indian media
conglomerate owned by Essel Group. Headquartered in Mumbai, it has interests in television,
print, internet, film, mobile content and allied businesses.
The company was launched on 15 December 1991 as Zee Telefilms, brandname that was
retained until 2006. In 2002, the company acquired a majority stake (51%) in ETC Networks. In
2006, they acquired Integrated Subscriber Management Services Limited, and in November
2006, it acquired an 50% stake in Taj television, owner of TEN Sports. On that same year, the
company was rebranded as Zee Entertainment Enterprises.

Companies In India
CH-3LITERATURE REVIEW

Companies In India
1) (Hua, Skanthavrathar, 2013) found that in Sri Lanka, there was not much
evidence linked to stock split announcements and stock prices behaviour
available to investors. The study was conducted to; scrutinize the stock price
response to stock split declaration. The study found that stock splits have a
significant signal and information content in the Colombo Stock Exchange
(CSE). On average, market positively reacts significantly to the announcement.
Further, the large negative cumulative average abnormal return (-6%) was
observed during the period. This results support the semi strong form efficient
market hypothesis for the sample companies within the study period since stock
prices adjust so fast to public information that investor can not earn an abnormal
return by trading in the stocks following the stock split announcement day.
2) (Sriram, 2016) had analysed the Market’s reaction to stock split announcements.
The study found that there was no reaction of the market to stock split
announcements. Average Abnormal Returns (AAR) and Cumulative Abnormal
Returns (CAR) were negative on the split date and around the split date. To
compare the AAR and CAR before and after the split date, paired t test was
employed. It was found that AAR had increased considerably in the post- split
period thereby indicating a slow momentum in the reaction to stock split
announcements. Average Security Return Valuation (ASRV) showed that there
was no association between the stock splits as a news and valuation of stocks.
Liquidity and Trading Range Hypotheses held good for the period of study.
3) (Vashisht,2017) in her paper mentioned that Stock Split involves the conversion
of one share of higher par value into certain number shares of lower par value in
a given ratio. Stock splits have become very common phenomena throughout
the world. In India stock splits came into existence after SEBI abolished the par
value of shares in 1999, provided the shares are dematerialized and face value
after split does not reduce below Re. 1. Since then a number of Indian
companies have gone for stock splits. The main motivations for the stock splits

Companies In India
are; the signalling effect about the future prospects of the company, to reduce
the per share price to make it more liquid, desire of the management to have
diffused ownership and to use stock split as a defence to a potential hostile
takeover. There are some issues associated with stock splits which must be
given due attention before deciding about stock splits. These issues include the
cost of the stock splits, impulsive selling of shares due to decline in the market
price of the shares triggered by stock splits, risk of lower share prices, listing
requirements and record keeping challenges.
4) (Joshipura,2014) had studied price and liquidity effect associated with stock
split surrounding its announcement and effective day by using standard event
studies methodology which, measures significance of abnormal return and
change in liquidity associated with an event. Interestingly his results were
slightly different from the evidence found from US, Germany etc. where there
was some significant positive abnormal return was observed to be associated
with stock split. His results suggests that though there was some positive
abnormal return associated surrounding announcement and effective day of the
stock split but It reverses in just a few days after the event day and ultimately
generates significant negative abnormal return in slightly longer post effective
( ED to ED+51 days) window. However, there was a significant improvement
seen in liquidity surrounding announcement and effective day of stock split. His
analysis suggested that stock split does not have any positive impact on wealth
of the share holder at all but it improves liquidity of the stock very significantly.
5) (Agara, 2014) investigated the effect of stock split on stock prices for firms
listed at the Nairobi Securities Exchange. The study established that the events
of stock splits announcements affect stock prices almost immediately and that
on average; it takes 3 day for prices to react to stock splits. In conclusion, the
study established that stock split positively impacts on the share prices and
hence recommends that CMA reviews the policy on this event to encourage
firms to adopt stock splitting, educate the public on the operations at the NSE to

Companies In India
reduce abnormal reaction of prices caused by speculative retail trading. This will
be in a bid to encourage more long-term investments than short-term ones as
well as impart knowledge on the public regarding stock market activity. The
study also recommended that NSE should maintain a record of the dates of
various events and make the information available to encourage scholars to
undertake research on these events. That way, they will gain from the research
and researchers would have easy access to information regarding stock split.
Lastly, CMA should ensure compliance with insider trading laws,
guidelines, rules and regulations by effectively monitoring the market. That
will eliminate incidence of: collusion between brokers and traders, inside trading
and leaking of information hence, boost investor’s confidence.
6) (Thirunellai,2014) found in her study that in the post-announcement period,

while the stock prices of the firms that announce the split earned only
insignificant excess returns over the broad market, the firms announcing the
split were successful in increasing the liquidity of their stocks. The historical
price movement indicates that for a given holding period (5-day, 10-day, 30-
day, 60 day and 360 day), buyers of stock in the post-split period are
inadequately rewarded compared to the pre-split/pre-announcement buyers.
7) (Chakrabarti,Gogoi,Faiz,Rathod, 2017) investigated the effect on stock return

after the stock split announcement and actual split in Indian context. Results
indicated a significantly positive impact of stock splits on the returns of stock
around the announcement day , whereas actual split day return was not
significant under the assumption of significance level 10% (90% confidence
interval)
8) (Malony,Mulhering,1992) found that while there was definitely a favourable

stock price reaction to the announcement of splits, the reason for the positive
announcement return was not well-determined. Conventional wisdom suggested
that the benefit of splits comes from improved share liquidity; yet empirical

Companies In India
evidence had produced ambiguous results on liquidity. More detailed theoretical

arguments pose stock splits as part of a strategy used by management to signal
value, yet such arguments seem overly complex for such a basic management
decision. Moreover, in spite of complex explanations, an anomaly remains:
splitting firms also experience positive returns on the split execution day. This
event is known well in advance, so any associated favourable information
should already be priced into the stock.
9) (Dennis,Strickland,2002) examined the influence of firm ownership

composition on both the abnormal returns at the announcement of a stock split
and liquidity changes following a stock split. They found three results. First, the
largest post-split increase in institutional ownership occurs for firms that had
low institutional ownership before the split. Second, changes in liquidity are
negatively related to the level of institutional ownership before the split. Last,
the abnormal return following a split was negatively related to the level of
institutional ownership before the split.
10) (Lakonishok,Lev,1987) investigated empirically why firms split their stock or

distribute stock dividends and why the market reacts favourably to these
distributions. The findings suggested that stock splits were mainly aimed at
restoring stock prices to a "normal range." Some support can also be found for
the oft-mentioned signalling motive of stock splits.
11) ( K.B,1966) made an attempt to develop a model that would provide a test of
whether, there was a significant price change associated with stock splits after
controlling fundamental factors (earnings and dividend) and the stock market
trend. The results were that there was a significant relative price change
associated with stock splits.

Companies In India
12) (K.Mishra,2007)paper suggested that stock splits have induced the market to
revise its optimistic valuation about future firm performance, rejecting
signalling hypothesis to which splits convey positive information to markets.
Hence, stock splits have reduced the wealth of the shareholders. The results also
showed that presence of a positive effect on volatility and trading volume
following the split events, thus suggesting that split events enhance liquidity.
13) (Korir,Odhiambo,Wawire,2016) found that splitting firms in Kenya had their

shares traded improve immediately after the event announcement. This was
because the shares turnover of six out of nine firms under the study had their
TAR mean () values increase immediately after the share split. The reduced
share prices after the stock split announcement implied affordability by the retail
investors which eventually improved the trading activity.
The improved trading activity was found to be consistent with the liquidity hypothesis
where firms broaden their shareholder base by making more shares available to retail
investors. It was also found that seven out of nine firms had a significant - statistic at
95% confidence level suggesting that stock split exercise had a positive influence on
the trading activity. This was consistent with the optimal trading range hypotheses
which states that firms improve liquidity by lowering the share prices to allow
affordability by a larger pool of investors. The results therefore suggested a positive
market reaction to stock split announcements. It was recommended that regulators
ought to amend the existing regulations to encourage more firms undergo stock split
as there is a proof that it improves firm performance.
14) (Han, 1998) found that a decrease in bid-ask spread and an increase in trading
volume after reverse splits. More importantly, the number of no trading days
significantly declines following reverse splits. For the control group, however, no
such changes are observed. These results suggest that reverse splits enhance the
liquidity of the stock.

Companies In India
15) (Lei, 2007) in their paper studied three main theories they were liquidity,
signalling, and optimal tick size theories. The empirical result was consistent with
the signalling hypothesis in the sense that the firm-specific information had been
found to decrease after the announcement of stock split. The liquidity had been
found to decrease (increase) and the transaction cost had been found to increase
(decrease) after the forward (reverse) split. Therefore, for the forward split, the
empirical result was not consistent with the liquidity hypothesis which states that
the liquidity should increase after the forward stock split. However, the evidence
for the reverse split was consistent with the liquidity theory. Even though the
increase in transaction cost was consistent with the optimal tick size hypothesis, the
decrease in liquidity was not consistent with it. Therefore, the optimal tick size
hypothesis was not fully supported by the empirical evidence.
16) (Copelan,1979) presented the evidence about the liquidity effects of stock splits
and found that liquidity was relatively lower following a split.
17) (Parmar,2016) analysed the information impact of the stock split on the companies.
There was a significant volume difference between a day before and after the stock
split.
18) (Kalay, Kronlund,2012) re-examined whether the abnormal returns around stock
split announcements could be explained by an information hypothesis. Their
evidence established a link between the abnormal returns and future earnings
growth. Analysts revise earnings forecasts by 2.2-2.5% around split
announcements, and this revision was significantly larger than that for matched
firms. They further showed the earnings information in a split likely arises from the
fact that splitting firms experience less mean reversion in their earnings growth
relative to matched firms. Consistent with an earnings information hypothesis, the
analyst revision and the abnormal returns were stronger for firms with more

Companies In India
opaque information environments. Furthermore, the cross-sectional variation in

analyst revisions was related to the variation in abnormal returns. They also found
evidence on splitting activity and the market reaction to splits that were
inconsistent with liquidity-based theories and mixed with respect to catering.
19) (Mittal,2015) studied the significance of emerging trend, its signalling effect on
share price and its impact on the wealth of the shareholders. The results showed
that the Indian Capital Market was semi strong efficient as it was using the
information relevant for security valuation and for investment decision making.
The role of SEBI could be instrumental in preventing insider trading so that the
confidence of the investors was maintained and the stock market could become
more vibrant and dynamic.
20) (Joshi,2014) examined the effects of stock splits made by technology companies
listed on AMEX/NYSE and NASDAQ. She analysed splitting companies before
and after stock splits. The results showed that an increase in return, profitability,
and liquidity in the year after the split. These findings strongly supported the
signalling and liquidity hypotheses. However, in contrast to the previous studies,
she did not find any support for the trading range or the shareholder base
hypothesis.

Companies In India
Table2.1: Summary of Literature Review

Name Objectives Conclusion
(Chakrabarti,Gogoi,Faiz,Rathod,2017 To investigate the effect A significant reaction on
) on stock return after the the stock price on the
stock split announcement split announcement day
and actual split. (AD), whereas it is less
significant in case of
actual stock split day.
(Thirunellai,2014) To examine four Split firms have enjoyed
important aspects related positive price effects as
to the stock split event: against the market (CNX
the effect on the liquidity 100 index) in the pre-split
of firms that go in for a period but the post-split
split; the trading range excess returns over the
hypothesis related to the market have been
impact on stock price; the statistically insignificant.
signalling hypothesis
related to the company’s
growth prospects; and the
multiple events
hypothesis.
(Agara,2014) To investigate the effect The events of stock splits
of stock split on stock announcements affect
prices for firms listed at stock prices almost
the Nairobi Securities immediately and that on
Exchange. average; it takes 3 day for
prices to react to stock
splits.
(Joshipura,2014) Investigates market There is no evidence for
reaction to stock splits any positive impact of
using the standard event stock splits on their

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study methodology. announcement in a

sample of large and liquid
stocks.
(Vashisht,2017) To examine the main The main motivations for
motivations, advantages the stock splits are; the
and limitations of stock signaling effect about the
splits. future prospects of the
company, to reduce the
per share price to make it
more liquid. There are
some issues associated
with stock splits which
must be given due
attention before deciding
about stock splits. These
issues include the cost of
the stock split, risk of
lower share prices, listing
requirements and record
keeping challenges.
(Sriram,2016) To analyse the Market’s The study finds that there

reaction to stock split is no reaction of the
announcements by market to stock split
Companies during the announcements.
period of study.
(Hua, Skanthavrathar,2013) This study scrutinizes the The study finds
stock price response to significant market
stock split declaration reactions on the split
and a test of market announcement day. The
efficiency in Colombo information of the split is

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Stock exchange (CSE). absorbed by the market

on the event day
(Day“0”), indicating
information efficiency.
(Malony,Mulhering,1992) Investigates stock splits: The liquidity hypothesis
why they happen, how states that splits provide
they affect shareholder better liquidity and
wealth, and whether they reduce trading costs. The
enhance liquidity for positive valuation effects
splitting firms. of split announcements
that have been reported in
the literature can be
explained using the
liquidity hypothesis.
(Dennis,Strickland,2002) To examine the impact of The abnormal return
firm ownership following a stock split is
composition on both the negatively co-related with
abnormal returns at the the degree of institutional
announcement of a stock ownership before the
split and liquidity split, in case of the firms
changes following a stock with less institutional
split. ownership before the
split, normally increase
their percentage share
after the split.

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Study investigates If the price of the stock

(Lakonishok,Lev,1987)
empirically why firms before the split was very
split their stock or high, in such cases stock
distribute stock dividends split is a good option to
and why the market enhance the marketability
reacts favourably to these of such a stock.
distributions.
( K.B,1966) To make an attempt to There is a significant
develop a model that relative price change
would provide a test of associated with stock
whether, there is splits.
significant price change
associated with stock
splits after controlling
fundamental factors
(earnings and dividend)
and the stock market
trend.
(Korir,Odhiambo,Wawire,2016) The results show that
The purpose of the study
splitting firms in Kenya
was to determine whether
had their shares traded
stock split events have a
improve immediately
significant effect on
after the event
shares turnover.
announcement.
(K.Mishra,2007) Results suggest that stock
Examines the market
splits have induced the
effect of stock splits on
market to revise its
stock price, return,
optimistic valuation about
volatility, and trading
future firm performance,
volume around the split
rejecting signaling
ex-dates for a sample of
hypothesis to which splits
stock splits undertaken in

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convey positive
the Indian stock market.
information to markets.
Hence, stock splits have
reduced the wealth of the
shareholders. The results
also show that presence
of a positive effect on
volatility and trading
volume following the
split events, thus
suggesting that split
events enhance liquidity.
(Han,1998) This study investigates Results indicate a

the liquidity effects of decrease in bid-ask
reverse stock splits using spread and an increase in
bid-ask spread, trading trading volume after
volume, and the number reverse splits. More
of no trading days as importantly, the number
proxies for the liquidity of no trading days
of the stock. significantly declines
following reverse splits.
For the control group,
however, no such
changes are observed.
These results suggest that
reverse splits enhance the
liquidity of the stock.
(Lei,2007) Empirically test all three The liquidity has been

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theories (liquidity, found to decrease

signalling, and optimal (increase) and the
tick size theories) using transaction cost has been
some of the most recent found to increase
methodologies. (decrease) after the
forward (reverse) split.
The evidence for the
reverse split is consistent
with the liquidity theory.
Even though the increase
in transaction cost is
consistent with the
optimal tick size
hypothesis, the decrease
in liquidity is not
consistent with it.
Therefore, the optimal
tick size hypothesis is not
fully supported by the
empirical evidence.
(Copelan,1979) To presents evidence Liquidity is relatively
about the liquidity effects lower following a split.
of stock splits.
(Parmar,2016) The prime objective of There is a significant
this paper is to analyse volume difference
the information impact of between the a day before
the stock split on the and after the stock split.
companies.
(Kalay, Kronlund,2012) Re-examine the original The future earnings
“information hypothesis”. growth of the splitting
firms is higher than that

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of matched firms with

similar past earnings
growth, for up to two
years following the split.
(Joshi,2014) Examines the effects of Results show that an
stock splits made by increase in return,
technology companies. profitability, and liquidity
in the year after the split.
(Mittal,2015) Objective of this paper is The results show that the
to check whether efficient Indian Capital Market is
market hypothesis holds semi strong efficient as it
for Indian stock market is using the information
or not i.e., whether there relevant for security
is any movement in share valuation and for
prices before or after the investment decision
rights issue making. The role of SEBI
announcements can be instrumental in
preventing insider trading
so that the confidence of
the investors is
maintained and the stock
market can become more
vibrant and dynamic.

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CH -4RESEARCH METHODOLOGY

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3.1 Research Problem Statement:
Many investors tend to believe that when a company goes for stock split it is a good
time to buy the stock of the company. Investors consider stock split to be a positive
signal about the company’s performance. Investors also tend to believe that the
price of the companyis likely to increase post stock split and they also feel
psychologically better about owning the stocks of those companies that have gone
for stock split. So it becomes important to analyse whether stock splits significantly
affect the price and trading volume of the stocks.
3.2 Objectives of the study:

3.2.1 Primary Objective
 To check the impact of stock splits on the stock price and stock trading volume from
2015 to 2017
3.2.2 Secondary Objectives
 To provide a theoretical framework of stock splits.
 To check whether there is a significant difference between the stock price and
trading volume of the companies one day before and after stock split.
trading volume of companies 15 days before and after stock split.
trading volume of companies on the day and one day after stock split.
trading volume of companiesone day before and on the day of stock split.
3.3 Hypothesis to be tested:
 H0: There is no significant difference between stock price on the day and 15 days
before the stock split.
 H0: There is no significant difference between stock price on the day and 15 days
after the stock split.
 H0: There is no significant difference between stock price on the day of stock split
and before the day ofstock split.

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and after the day ofstock split.
 H0: There is no significant difference between stock price 15 days before and after
stock split.
 H0: There is no significant difference between stock price a day before and after stock
split.
 H0: There is no significant difference between stock price a day before and on the day
of stock split for the companies belonging to group A.
 H0: There is no significant difference between stock price on the day and a day after
stock split for companies belonging to group A.
 H0: There is no significant difference between stock price a day before and day after
and 15 days before the day of stock split for companies belonging to group A.
and 15 days after the day of stock split for companies belonging to group A.
 H0: There is no significant difference between stock price 15 days before and after
 H0: There is no significant difference between volume traded on the day of stock split
and 15 days before the day of stock split.
and 15 days after the day of stock split.
and before the day of stock split.
and after the day of stock split.
 H0: There is no significant difference between volume traded 15 days before and after
stock split.
 H0: There is no significant difference between volume traded a day before and after
stock split.

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 H0: There is no significant difference between stock trading volume a day before and
after stock split for companies belonging to group A.
and before the day of stock split for companies belonging to group A.
and after the day of stock split for companies belonging to group A.
and 15 days before the day of stock split for companies belonging to group A.
and 15 days after the day of stock split for companies belonging to group A.
 H0: There is no significant difference between volume traded 15 days before and after
stock split
3.4 Type of Research Design:
 The type of Research design used is the Descriptive Research Design.

 For this project, Descriptive Type of research design which falls in conclusive
type of design is used as it describes data and characteristics about the
phenomenon being studied. Descriptive research answers the questions who,
what, where, when and how.
3.5 Scope of the Research:
The companies who had gone for stock splits between the years 2015-2017 are taken for
analysis to check if there is an impact of stock splits on the company’s stock price and trading
volume. The companies who had gone illiquid following the stock splits have not been
considered.
3.6 Sampling Plan:
i) Population: The total number of companies who had gone for stock splits during the
year 2015-2017 is 238.
ii) Sample Size: The project is made on 177 companies; those companies who became
illiquid following the stock split have not been considered.

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iii) Sampling Method: There are two types of Sampling Method 1) Probabilistic
Sampling Method & 2) Non Probabilistic Sampling Method. Here, Convenience
sampling, a type of non-probability sampling method is adopted. Convenience
Sampling is atechnique where subjects are selected because of their convenient
accessibility and proximity to the researcher.
iv)Sampling Element: The individual company who had gone for stock split in the
period of 2015-2017.
3.7 Data Analysis Techniques:
Paired Sample T-test analysis has been undertaken to conduct the data analysis. A Paired
sample t-test is an analysis of two population means through the use of statistical
examination; a t-test with two samples is commonly used with small sample sizes, testing the
difference between the samples when the variances of two normal distributions are not
known.
A paired sample t-test looks at the t-statistic, the t-distribution and degrees of freedom to
determine the probability of difference between populations; the test statistic in the test is
known as the t-statistic. (https://www.investopedia.com)
3.8 Limitations of the Study:
 Only the Companies who have gone for stock splits during 2015-2017 have
been considered for the study.
 An assumption is made the mostly the changes in stock price and trading
volume is due to the stock splits phenomenon, therefore other factors such as
Bonus share declaration, Dividend declaration, any news, etc. have not been
considered.
 Due to time limitation other factors were not taken into consideration for
analysis.
 The normality of the data has not been checked.

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CH-5 DATA ANALYSIS & FINDINGS

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4.1Paired Sample t-test on stock price on the day and 15 days before stock
split
H0: There is no significant difference between stock price on the day and 15 days before the
stock split.
Table 4.1 Paired Sample t-test on stock price on the day and 15 days before stock split
Results in SPSS
Stock price on the N Mean t-value p-value

day and 15 days
before the stock 177 25.3316 0.36978 0.712
split
Table 4.1a Paired Sample t-test on stock price on the day and 15 days before stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 242.454 217.118
6 5
Variance 541251. 289673.
6 5
Observations 177 177
Hypothesized Mean 0
Difference
Df 322
t Stat 0.36978
1
P(T<=t) one-tail 0.35589

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4
t Critical one-tail 1.6496
P(T<=t) two-tail 0.71178
9
t Critical two-tail 1.96735
9
Interpretation – From table 4.1 and 4.1a, it can be observed that the p value is 0.712 which is
more than 0.05. So it can be said that there is no significant difference between the stock
price 15 days before and the day of stock split. So the null hypothesis cannot be rejected.
4.2 Paired Sample t-test on stock price on the day and 15 days after stock
split
H0: There is no significant difference between stock price on the day and 15 days after the
stock split.
Table 4.2 Paired Sample t-test on stock price on the day and 15 days after stock split
Results in SPSS

day and 15 days
after the stock split 177 43.0915 0.6317 0.528

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Table 4.2a Paired Sample t-test on stock price on the day and 15 days after stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 242.454 199.363
6 1
Variance 541251. 282354.
6 4
Hypothesized Mean 0
Difference
Df 320
t Stat 0.63171
1
3
9
7
5
price on the day and 15 days after the stock split. So the null hypothesis cannot be rejected.

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4.3 Paired Sample t-test on stock price on the day and before the day of
stock split
H0: There is no significant difference between stock price on the day of stock split and before
the day of stock split.
Table 4.3 Paired Sample t-test on stock price on the day and before the day of stock
split
Results in SPSS

day of stock split
and before the day 177 20.1705 0.2809 0.779
of stock split
Table 4.3a Paired Sample t-test on stock price on the day and before the day of stock
split
Results in Excel
Variabl Variabl
e1 e2
Mean 242.454 222.284
6 1
Variance 541251. 371722.
6 9
Hypothesized Mean 0
Difference
Df 340
t Stat 0.28085

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8
8
6
6
price one day before and on the day of stock split. So the null hypothesis cannot be rejected.
4.4 Paired Sample t-test on stock price on the day and after the day of stock
split
H0: There is no significant difference between stock price on the day of stock split and after
the day of stock split.
Table 4.4 Paired Sample t-test on stock price on the day and after the day of stock split
Results in SPSS

day of stock split
and after the day 177 36.5482 0.2985 0.597
of stock split

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Table 4.4a Paired Sample t-test on stock price on the day and after the day of stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 242.454 205.906
6 4
Variance 541251. 303107.
6 7
Hypothesized Mean 0
Difference
Df 326
t Stat 0.52916
2
6
1
3
8
price on the day and after the day of stock split. So the null hypothesis cannot be rejected.

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4.5 Paired Sample t-test on stock price 15 days before and 15 days after the
stock split
H0: There is no significant difference between stock price 15 days before and after stock
split.
Table 4.5 Paired Sample t-test on stock price 15 days before and 15 days after the stock
split
Results inSPSS
Stock price 15 N Mean t-value p-value

days before and
15 days after stock 177 17.7554 0.3123 0.755
split
Table 4.5a Paired Sample t-test on stock price 15 days before and 15 days after the
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 217.118 199.363
5 1
Variance 289673. 282354.
5 4
Hypothesized Mean 0
Difference
Df 352
t Stat 0.31232
6

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9
4
7
6
price 15 days before and 15 days after of stock split. So the null hypothesis cannot be
rejected.
4.6 Paired Sample t-test on stock price a day before and day after stock
split
H0: There is no significant difference between stock price a day before and after stock split.
Table 4.6 Paired Sample t-test on stock price a day before and day after stock split
Results in SPSS
Stock price a day N Mean t-value p-value

before and day
after stock split 177 16.3777 0.2652 0.791

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Table 4.6a Paired Sample t-test on stock price a day before and day after stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 222.284 205.906
1 4
Variance 371722. 303107.
9 7
Hypothesized Mean 0
Difference
df 348
t Stat 0.26524
2
4
4
price a day before and a day after stock split. So the null hypothesis cannot be rejected.

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4.7 Paired Sample t-test on stock price on the day and before the day of
stock split
H0: There is no significant difference between stock price a day before and on the day of
stock split for the companies belonging to group A.
Table 4.7 Paired Sample t-test on stock price on the day and before the day of stock
split
Results in SPSS

before and on the
day of stock split 27 16.0196 0.1659 0.868
for group A
companies
Table 4.7a Paired Sample t-test on stock price on the day and before the day of stock
split
Results in Excel
Variabl Variabl
e1 e2
Mean 408.039 392.02
6
Variance 141405. 110308.
4 7
Observations 27 27
Hypothesized Mean 0
Difference
Df 51
t Stat 0.16591

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3
1
5
1
4
price before the day and on the day of stock split. So the null hypothesis cannot be rejected
4.8 Paired Sample t- test on stock price on the day and a day after stock
split
H0: There is no significant difference between stock price on the day and a day after stock
split for companies belonging to group A.
Table 4.8 Paired Sample t- test on stock price on the day and after the day of stock split
Results in SPSS

after and on the
day of stock split 27 14.5633 0.1514 0.880
for group A
companies

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Table 4.8a Paired Sample t- test on stock price on the day and after the day of stock
split
Results in Excel
Variabl Variabl
e1 e2
Mean 408.039 393.476
6 3
Variance 141405. 108364.
4 4
Observations 27 27
Hypothesized Mean 0
Difference
df 51
t Stat 0.15141
6
2
5
5
4
price on the day and after the day of stock split. So the null hypothesis cannot be rejected

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4.9 Paired Sample t-test on stock price a day before and a day after stock
split
H0: There is no significant difference between stock price a day before and day after stock
split for companies belonging to group A.
Table 4.9 Paired Sample t-test on stock price a day before and a day after stock split
Results in SPSS

before and day
after stock split for 27 -1.4563 -0.0162 0.987
group A
companies
Table 4.9a Paired Sample t-test on stock price a day before and a day after stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 392.02 393.476
3
Variance 110308. 108364.
7 4
Observations 27 27
Hypothesized Mean 0
Difference
Df 52
t Stat -
0.01618

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6
9
1
7
price a day before and a day after stock split. So the null hypothesis cannot be rejected.
4.10 Paired Sample t-test on stock price on the day and 15 days before
stock split
H0: There is no significant difference between stock price on the day of stock split and 15
days before the day of stock split for companies belonging to group A.
Table 4.10 Paired Sample t-test on stock price on the day and 15 days before stock split
Results in SPSS

day of stock split
and 15 days before 27 27.3677 0.2873 0.775
the day of stock
split for group A
companies

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Table 4.10a Paired Sample t-test on stock price on the day and 15 days before stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 408.039 380.671
6 9
Variance 141405. 103613.
4 3
Observations 27 27
Hypothesized Mean 0
Difference
df 51
t Stat 0.28729
1
7
5
4
4
Interpretation – From table 4.10 and 4.10a, it can be observed that the p value is 0.775 which
is more than 0.05. So it can be said that there is no significant difference between the stock
price on the day and 15 days before the stock split. So the null hypothesis cannot be rejected

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4.11 Paired Sample t- test on stock price on the day and 15 days after the
stock split
H0: There is no significant difference between stock price on the day of stock split and 15
days after the day of stock split for companies belonging to group A.
Table 4.11 Paired Sample t- test on stock price on the day and 15 days after the stock
split
Results in SPSS

day of stock split
and 15 days after 27 16.5734 0.1689 0.866
the day of stock
split for group A
companies
Table 4.11a Paired Sample t- test on stock price on the day and 15 days after the stock
split
Results in Excel
Variabl Variabl
e1 e2
Mean 408.039 391.502
6 2
Variance 141405. 117261.
4 8
Observations 27 27
Hypothesized Mean 0
Difference
df 52
t Stat 0.16895

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8
3
9
5
7
price on the day and 15 days after the stock split. So the null hypothesis cannot be rejected.
4.12 Paired Sample t-test on stock price 15 days before and 15 days after
the stock split
H0: There is no significant difference between stock price 15 days before and after stock split
for companies belonging to group A.
Table 4.12 Paired Sample t-test on stock price 15 days before and 15 days after the
stock split
Results in SPSS
Stock price 15 N Mean t-value p-value

days before and 15
days after stock 27 -10.8303 -0.1197 0.905
split for group A
companies

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Table 4.12a Paired Sample t-test on stock price 15 days before and 15 days after the
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 380.671 391.502
9 2
Variance 103613. 117261.
3 8
Observations 27 27
Hypothesized Mean 0
Difference
Df 52
t Stat -
0.11974
4
9
8
7
price 15 days before and 15 days after the stock split. So the null hypothesis cannot be
rejected.

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4.13 Paired Sample t-test on trading volume on the day and 15 days before
the stock split
H0: There is no significant difference between volume traded on the day of stock split and 15
days before the day of stock split.
Table 4.13 Paired Sample t-test on trading volume on the day and 15 days before the
stock splitresults in SPSS
Volume traded on N Mean t-value p-value

the day of stock
split and 15 days 177 147238 0.9190 0.358
before the day of
stock split
Table 4.13a Paired Sample t-test on trading volume on the day and 15 days before the
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 510305. 363067.
1 1
Variance 3.42E+1 1.12E+1
2 2
Hypothesized Mean 0
Difference
Df 280
t Stat 0.91903
2

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5
4
2
is more than 0.05. So it can be said that there is no significant difference between the trading
volume on the day and 15 days before the stock split. So the null hypothesis cannot be
rejected.
4.14 Paired Sample t-test on trading volume on the day and 15 days after
the stock split
days after the day of stock split.
Table 4.14 Paired Sample t-test on trading volume on the day and 15 days after the
stock split
Results in SPSS

the day of stock
split and 15 days 177 135202.4 0.9118 0.363
after the day of
stock split

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Companies In India
Table 4.14a Paired Sample t-test on trading volume on the day and 15 days after the
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 510305. 366102.
1 7
2 2
Hypothesized Mean 0
Difference
Df 271
t Stat 0.91180
3
1
6
3
6
volume before and the day and on the day of stock split. So the null hypothesis cannot be
rejected.

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4.15 Paired Sample t-test on trading volume on the day and a day before
stock split
H0: There is no significant difference between volume traded on the day of stock split and
before the day of stock split.
Table 4.15 Paired Sample t-test on trading volume on the day and a day before stock
split
Results in SPSS

the day of stock
split and before the 177 -232305.2 -1.0886 0.277
day of stock split
Table 4.15a Paired Sample t-test on trading volume on the day and a day before stock
split
Results in Excel
Variabl Variabl
e1 e2
Mean 510305. 742610.
1 3
2 2
Hypothesized Mean 0
Difference
Df 344
t Stat -
1.08863

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8
5
7
4
is more than 0.05. So it can be said that there is no significant difference between trading
volume on the day and a day before stock split. So the null hypothesis cannot be rejected.
4.16 Paired Sample t-test on trading volume on the day and a day after
stock split
after the day of stock split.
Table 4.16 Paired Sample t-test on trading volume on the day and a day after stock split
Results in SPSS

the day of stock
split and after the 177 53181.1 0.3096 0.757
day of stock split

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Table 4.16a Paired Sample t-test on trading volume on the day and a day after stock
split
Results in Excel
Variable Variabl
1 e2
Mean 510305. 457124
1
2 2
Hypothesized Mean 0
Difference
Df 321
t Stat 0.30965
4
4
8
2
volume on the day and a day after stock split. So the null hypothesis cannot be rejected.

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Companies In India
4.17 Paired Sample t-test on trading volume 15 days before and 15 days
after the stock split
H0: There is no significant difference between volume traded 15 days before and after stock
split.
Table 4.17 Paired Sample t-test on trading volume 15 days before and 15 days after the
stock split
Results in SPSS
Volume traded 15 N Mean t-value p-value

days before and 15
days after stock 177 -3035.6 -0.0277 0.978
split
Table 4.17a Paired Sample t-test on trading volume 15 days before and 15 days after the
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 363067. 366102.
1 7
2 2
Hypothesized Mean 0
Difference
Df 351
t Stat -
0.02769

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2
6
4
6
is more than 0.05. So it can be said that there is no significant difference between the volume
traded 15 days before and 15 days after stock split. So the null hypothesis cannot be rejected.
4.18 Paired Sample t-test on trading volume a day before and a day after
stock split
H0: There is no significant difference between volume traded a day before and after stock
split.
Table 4.18 Paired Sample t-test on trading volume a day before and a day after stock
split
Results in SPSS
Volume traded N Mean t-value p-value

day before and
day after stock 177 285486.3 1.4969 0.135
split

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Table 4.18a Paired Sample t-test on trading volume a day before and a day after stock
split
Results in Excel
Variable Variabl
1 e2
Mean 742610. 457124
3
2 2
Hypothesized Mean 0
Difference
Df 295
t Stat 1.49695
2
7
5
5
8
volume a day before and a day after the stock split. So the null hypothesis cannot be rejected.

Companies In India
4.19 Paired Sample t-test on trading volume a day before and a day after
stock split
H0: There is no significant difference between stock trading volume a day before and after
Table 4.19 Paired Sample t-test on trading volume a day before and a day after stock
split
Results in SPSS
Trading volume a N Mean t-value p-value

day before and
day after stock 27 919717 0.9921 0.326
split for group A
companies
Table 4.19a Paired Sample t-test on trading volume a day before and a day after stock
split results in Excel
Variabl Variabl
e1 e2
Mean 2926168 2006451
3 2
Observations 27 27
Hypothesized Mean 0
Difference
Df 48
t Stat 0.99208
7

Companies In India

4
4
5
is more than 0.05. So it can be said that there is no significant difference between volume
trading a day before a day after the stock split. So the null hypothesis cannot be rejected
4.20 Paired Sample t-test on trading volume on the day and before the day
of stock split
before the day of stock split for companies belonging to group A.
Table 4.20 Paired Sample t-test on trading volume on the day and before the day of
stock split
Results in SPSS

the day of stock
split and before
27 -417809 -0.3816 0.704
the day of stock
split for group A
companies

Companies In India
Table 4.20a Paired Sample t-test on trading volume on the day and before the day of
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 250835 292616
9 8
3 3
Observations 27 27
Hypothesized Mean 0
Difference
Df 52
t Stat -
0.38166
5
9
1
7
trading on the day and before the day of stock split. So the null hypothesis cannot be rejected

Companies In India

Companies In India
4.21 Paired Sample t-test on volume trading on the day and after the day of
stock split
after the day of stock split for companies belonging to group A.
Table 4.21 Paired Sample t-test on volume trading on the day and after the day of stock
split
Results in SPSS

the day of stock
split and after the
day of stock split 27 501908 0.5193 0.606
for group A
companies

Companies In India
Table 4.21a Paired Sample t-test on volume trading on the day and after the day of
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 2508359 2006451
3 2
Observations 27 27
Hypothesized Mean 0
Difference
Df 46
t Stat 0.51925
8
6
6
trading on the day and after the day of stock split. So the null hypothesis cannot be rejected

Companies In India
4.22 Paired Sample t-test on trading volume on the day and 15 days before
stock split
days before the day of stock split for companies belonging to group A.
Table 4.22 Paired Sample t-test on trading volume on the day and 15 days before stock
split
Results in SPSS

the day of stock
split and 15 days 27 1000240 1.1083 0.275
before the day of
stock split for
group A
companies

Companies In India
Table 4.22a Paired Sample t-test on trading volume on the day and 15 days before stock
split
Results in Excel
Variable Variabl
1 e2
Mean 2508359 150811
9
3 2
Observations 27 27
Hypothesized Mean 0
Difference
Df 39
t Stat 1.10826
5
8
5
5
1
trading on the day and 15 days before the stock split. So the null hypothesis cannot be
rejected.

Companies In India
4.23Paired Sample t-test on trading volume on the day and 15 days after
the stock split
days after the day of stock split for companies belonging to group A.
Table 4.23: Paired Sample t-test on trading volume on the day and 15 days after the
stock split
Results in SPSS

the day of stock
split and 15 days 27 934322 1.0603 0.296
after the day of
stock split for
group A
companies

Companies In India
Table 4.23a Paired Sample t-test on trading volume on the day and 15 days after the
stock split
Results in Excel
Variabl Variabl
e1 e2
Mean 2508359 1574037
3 2
Observations 27 27
Hypothesized Mean 0
Difference
Df 37
t Stat 1.06027
3
6
4
3
2
trading on the day and 15 days after the stock split. So the null hypothesis cannot be rejected

Companies In India
4.24 Paired Sample t-test on trading volume 15 days before and 15 days
after the stock split
H0: There is no significant difference between volume traded 15 days before and after stock
split
Table 4.24: Paired Sample t-test on trading volume 15 days before and 15 days after the
stock split
Results in SPSS
Volume traded 15 N Mean t-value p-value

days before and
15 days after stock 27 -65918 -0.1169 0.907
split
Table 4.24a Paired Sample t-test on trading volume 15 days before and 15 days after the
stock split
Results in Excel
Variabl Variable
e1 2
Mean 150811 1574037
9
2
Observations 27 27
Hypothesized Mean 0
Difference
df 51
t Stat -

Companies In India
0.11693
6
5
2
4
trading 15 days before and 15 days after the stock split. So the null hypothesis cannot be
rejected

Companies In India
CH-6 CONCLUSION & SUGGESTIONS

Companies In India
5.1CONCLUSIONS:
 Companies generally go for stock splits to increase the liquidity in the market and so
as to make their share affordable for small investors. (Source: Stock Splits in India by
AnubhaVashisht)
 Whereas investors may sometimes wait for the stock splits to purchase the shares with
a view that the share price will increase in the near future and to earn good return
from it.
 The primary objective of this study was to analyse the impact of stock splits on stock
price and trading volume of selected Indian Companies who had gone for stock splits
during 2015-2017.
 From the data analysis it can be concluded the stock splits did not had any impact on
the stock prices and trading volumes of the companies during 2015-2017.
 (Chakrabarti,Gogoi,Faiz,Rathod, 2017) in their study stated that impact of stock split
on stock price was less significant.(Thirunellai,2014) in her study mentioned that in
the post- split period the excess return over market had been statistically
insignificant.The results of the present study are similar to the result of these
researchers.
 Further analysis of companies belonging to group A was done to check if there was
any impact on stock price and trading volume due to stock splits, however there was
no significant impact found in the analysis.

Companies In India
5.2 SUGGESTIONS:
 The analysis confirms that the manner of slicing does not make the cake bigger.
 The price performance of the share depends on the state of the market and the
fundamentals of the company once the transients settle down.
 Based on the analysis done in the study, investors are advised to look at the
fundamentals of the company before taking a position immediately after a stock split.

Companies In India
BIBLIOGRAPHY

Companies In India
Bibliography
http://www.moneycontrol.com.
https://www.bseindia.com.
http://www.business-standard.com.
https://www.thehindubusinessline.com.
https://economictimes.indiatimes.com.
https://www.indiainfoline.com.
AGARA, B. (2014). THE EFFECT OF STOCK SPLIT ON SHARE PRICES OF COMPANIES LISTED AT THE
NAIROBI SECURITIES EXCHANGE .
C.R.KOTHARI. (1985). Research Methodology- Methods and Techniques 3rd edition. New Age
International.
Chakrabarti, B. B. (2017). Impact of Stock Splits on Returns: Evidence from Indian Stock Market .
Copeland, T. E. (1979). Liquidity Changes Following Stock Splits. The Journal of Finance.
Dennis, P., & Strickland, D. (2002). The effect of stock splits on liquidity and excess returns:Evidence
from shareholder ownership composition .
GEHINIJOSHI. (2014). EFFECTS OF STOCK EFFECTS OF STOCKSPLITS ON RETURN AND LIQUIDITY:A

STUDY ON TECHNOLOGICAL COMPANIES.
Han, K. C. (1998). Insider ownership and signals: evidence from stock split announcement effects.
http://profit.ndtv.com. (n.d.).
Johnson, K. B. (1966). STOCK SPLITS AND PRICE CHANGE. The Journal of Finance.

Companies In India
Joshipura, M. (2014). Price and liquidity effects of stock split: An Empirical evidence from Indian
stock market.
Kalay, A., & Kronlund, M. (2012). The Market Reaction to Stock Split Announcements: Earnings
Information After All.
Korir, S. K., Odhiambo, A. O., & Wawire, P. (2016). Stock Splits and Performance of Firms Listed at
the Nairobi Securities Exchange, Kenya. International Journal of Sciences:Basic & Applied
Researh.
Lakonishok, J., & Lev, B. (1987). Stock Splits and Stock Dividends: Why, Who, and When. Journal Of
Finance.
Lei, Z. (2007). A New Study On The Impacts Of Stock Splits.
Lev, J. L. (1987). Stock Splits and Stock Dividends: Why, Who, and When. Journal of Finance.
Liu, H., & Ramesh, S. (2013). A Study on Stock Split Announcements and its Impact on Stock Prices in
Colombo Stock. Global Journal of Management and Business Research Finance .
M.Sriram. (2016). Empirical Evidence of Market Reaction to Stock Splits.
MISHRA, A. K. (2007). THE MARKET REACTION TO STOCK SPLITS — EVIDENCE FROM INDIA.
International Journal of Theoretical & Applied Finance.
Mittal, D. S. (2015). Stock Market Reactions to Announcements of Stock Splits. Journal of

Management Sciences And Technology.
Mulherin, M. M. (1992). The Effects of Splitting on the Ex: A Microstructure Reconciliation. Financial
Management.
Parmar, D. C. (2016). An Empirical Research on Stock Split: Volatility Measure of Stock Price. Pacific
Business Review International.
Thirunellai, S. (2014). Stock Splits: Reasons and valuation effects .
Vashisht, A. (2017). STOCK SPLITS IN INDIA .

Companies In India

Companies In India
Stock Price and Trading Volume 15 days before and 15 days after stock split of the
companies gone for Stock Split during 2015-2017
Date Company Old New Share Share Share Volume Volume Volume
FV FV Price Price 15 Price Traded traded 15 traded 15
on days 15 on the days before days after
the before days date of stock split stock split
date stock after stock split
of split stock
stock split
split
28-12- ChamanLalSe 10 2 57.03 57.04 64.59 477 5385 42254
15 tia Exports
Ltd.
22-12- MFL India 10 1 0.85 0.71 0.71 1620008 1250110 290172
15
21-12- Indian Terrain 10 2 155.5 138.25 141.80 79078 10285 8242
15 0
17-12- SMS Pharma 10 1 102.7 91.73 125.50 90039 161440 49353
15 5
16-12- Setco 10 2 44.1 44.48 42.30 14756 44420 41876
15 Automotive
Ltd.
16-12- Citizen Yarns 10 5 21.65 21.65 21.65 975 600 13357
15
16-12- Noble 10 5 11.05 14.88 13.85 55141 2 41301
15 Polymers
15-12- Jackson 10 1 23.9 24.60 24.40 29000 40000 54000
15 Investments
14-12- Khoobsurat 10 1 3.60 3.52 4.30 2025 1000 729
15 Ltd.
10-12- J Kumar Infra 10 5 368.2 371.13 391.05 29714 45092 119902
15 8
03-12- Jamna Auto 10 5 23.28 21.86 25.96 3264435 759860 2975380
15
02-12- Sharp 10 1 6.40 6.1 5.65 5 16 10
15 Investments
Ltd
02-12- Vivid Global 10 5 10.00 10.45 8.40 765 2 1000
15
26-11- VitanAgro 10 1 17.47 21.35 17.20 7502 1990 25060
Companies In India
15 Industries Ltd.
26-11- NatcoPharma 10 2 543.8 491.88 532.60 1087976 98070 432875
15 5
26-11- Avanti Feeds 10 2 502 518.76 470.65 32119 13530 28948
15
26-11- Assoc Stone 5 1 15.96 11.48 16.08 137336 48088 584979
15
06-11- Shilpa 2 1 474.7 495.15 483.25 3960 10042 8873
15 0
30-10- Diligent Ind 10 5 20.80 20.35 25.50 2187 344 3019
15
30-10- Kesar Petro 10 1 51.80 54.11 62.45 1854 14860 39865
15
29-10- SarlaPerforma 10 1 0000 49.50 55.55 0000 22990 952
15 n
15-10- Mudunuru 10 2 41.50 34.42 41.90 57579 50 17900
15
15-10- Lambodhara 10 5 349.5 397.25 308.50 108191 30680 23632
15 Text 0
07-10- Bata India 10 5 549.7 564.60 525.85 230255 640202 343193
15 5
06-10-5 Cadila Health 5 1 423.2 387.86 443.10 657983 652400 2948880
0
05-10- ToyamInd 10 1 45.40 43.86 39.90 378973 162590 235245
15
23-09- Alankit 10 2 10.5 10.46 12.67 142379 546060 493624
15
22-09- Samtex 10 2 14.95 13.92 12.88 10266 12390 7102
15 Fashions
16-09- Aegis 10 1 80.60 79.50 88.30 124901 113230 255856
15 Logistics
16-09- Urja Global 10 1 3.15 2.33 2.85 210639 783160 147533
15
03-09- Kushal 10 2 16.50 15.30 16.55 20000 20000 20000
15
21-08- ITD 10 1 81.75 80.10 81.00 69300 322260 28959
15 Cementation
17-08- Signet Ind 10 1 38.00 32.62 32.85 66,881 3880 33,449
15
16-07- High Ground 10 1 43.45 36.14 49.09 483897 415184 256108
15
Companies In India
Ent
02-07- Birdhi Chand 10 1 52.50 54.83 60.75 135 230 1268
15
25-06- JMT Auto 10 2 17.45 15.00 26.55 79202 20566 65590
15
12-06- ASIS 100 1 19.50 21.2 18.00 122 5 2226
15 Logistics
11-06- FineotexChe 10 2 33.80 30.30 36.00 25003 60140 97125
15 m
04-06- Sunstar Realty 10 1 40.20 41.67 37.00 6000 471000 408000
15
04-06- ElproInt 10 2 24.84 20.83 26.39 22732 2815 3412
15
04-06- Rollatainers 10 2 36.50 38.56 31.60 3163 33180 34522
15
21-05- Kkalpana 10 2 26.90 20.80 24.75 19748 20830 43274
15 Industries
11-05- Rasi 10 2 14.25 15.45 14.25 13160 3815 139
15 Electrodes
23-04- Titagarh 10 2 103.6 121.43 92.55 1081245 1688580 527023

15 Wagons 5
23-04- Indag Rubber 10 2 203.7 213.20 174.10 39084 227005 9094
15 5
16-04- Pitti 10 5 68.50 57.40 65.90 16947 14710 15786
15 Lamination
16-04- Arnold 10 2 11.12 10.64 10.48 129621 336713 118960
15 Holdings
09-04- Menon 5 1 26.33 22.52 31.67 26261 13693 13223
15 Bearings
30-03- KSS 10 1 0.37 .038 0.40 1019676 1416291 2965451
15
26-03- Kansai 10 1 214.8 226.10 237.35 24802 7280 101564
15 Nerolac 5
25-03- PanaficInd 10 1 12.00 11.24 15.27 2 10000 25
15
23-03- Granules 10 1 86.40 82.01 90.55 688317 1779000 1260157
15 India
20-03- Ajanta 5 2 1130. 1198.48 1315.4 239544 115125 162965
15 Pharma 80 5
19-03- Tech 10 5 678.3 790.54 652.85 3616042 1725044 1922672
Companies In India
15 Mahindra 0
16-03- Monotype 10 1 15.09 13.05 16.05 202 100 1200
15 India
11-03- Aplaya 10 1 48.60 44.67 47.70 110005 490000 645015
15 Creation
02-03- Channel Nine 10 1 40.60 42.65 26.70 2500 75000 625000
15
27-02- Amines Plast 10 2 18.20 18.41 17.53 43740 36400 16804
15
27-02- Hikal 10 2 145.5 140.58 134.50 8050 10895 3317
15
26-02- Grandma 10 1 19.50 17.70 14.30 10 178660 57876
15 Trading
20-02- HPC 10 1 47.2 46.09 46.60 5700 57000 81000
15 Biosciences
18-02- ZydenGentec 10 2 1.38 1.16 1.21 686671 74286 14755
15
18-02- Yamini 10 1 54.95 49.70 61.65 3 250 7
15 Investment
Company
09-02- Himachal 10 1 8.7 7.82 10.90 6001 18270 19286
15 Fibres
02-02- Poly 10 5 252.2 227.29 247.55 13852 13728 29918
15 Medicure 8
23-01- Tata Coffee 10 1 102.2 93.95 92.40 812406 78590 146605
15 5
22-01- Corporation 10 2 74.30 64.84 64.30 1547731 362705 319513
15 Bk
22-01- Bank of 10 2 223.1 213.34 177.55 4098897 3479130 6190147
15 Baroda 0
21-01- RS Software 10 5 289.5 306.25 241.80 10295 240942 205934
15 5
08-01- Eco Friendly 10 1 51 53.45 49.50 2000 296000 52000
15
08-01- Berger Paints 2 1 174.6 144.40 160.48 3407865 701999 686795
15 9
06-01- Hathway 10 2 66.40 66.44 64.85 1372429 176145 1335985
15 Cable
27-12- Gulshan Poly 5 1 74.20 389.35 75.50 1993 390 3693
16
Companies In India
21-12- Shree Global 5 1 3.48 3.03 3.48 6945 200 6313

16
15-12- Alankit 2 1 36.20 2893 33.25 652837 467616 419594
16
13-12- KNR 10 2 170.7 144.91 171.35 34494 790 10950
16 Construct 0
08-12- SatkarFinleas 10 1 8.40 13.57 6.45 3346 52000 1001
16 e
01-12- Sunil 10 1 10.60 15.64 15.54 2636 3941220 3012993
16 HitechEng
29-11- MangalamInd 10 1 2.40 2.92 2.52 129980 94970 13853
16
29-11- KPR Mill 10 5 601.0 532.70 611.75 2867 4794 1108
16 5
23-11- Capri Global 10 2 55.11 65.80 59.00 3915 2770 1320
16
17-11- KarurVysya 10 2 84.32 88.43 75.79 84565 108146 37045
16
11-11- Indo Count 10 2 151.6 158.54 142.25 155 79390 62432
16 5
10-11- Inani Marbles 10 2 56.90 51.43 51.80 533 800 920
16
02-11- VamaInd 10 2 16.85 11.94 14.90 112497 42765 91544
16
28-10- Gold Line 10 1 26.50 30.49 23.25 1364 4 23
16
26-10- BhageriaIndu 10 5 373.4 283.53 405.30 67741 31876 18800
16 0
25-10- Viji Finance 10 1 16.23 13.83 15.68 71732 45127 4842
16
25-10- NegotiumInt 10 1 82.00 76.10 67.70 157603 6050 196
16
25-10- VKJ Infra 10 1 9.38 10.25 11.18 111855 150667 1084
16
20-10- Menon 10 1 22.85 18.80 25.05 185285 230590 94521
16 Pistons
20-10- Sinner Energy 10 1 6.40 5.23 6.15 249728 57500 206156
16
19-10- Caplin Labs 10 2 292.9 277.46 365.85 11663 25830 45164
16 5
13-10- SresthaFinves 10 2 5.58 6.07 7.85 14 15,540 600
Companies In India
16 t
13-10- Gyscoal 10 1 13.35 10.75 13.25 561886 1274010 155552
16 Alloys
10-10- Pact 10 1 7.15 5.23 6.20 72597 172750 52400
16 Industries
10-10- 8K Miles Soft 10 5 821.4 713.23 758.10 51131 25037 5648
16 5
06-10- Grasim 10 2 543.8 491.88 532.60 1087976 98070 432875
16 5
04-10- Diamond 10 1 1.87 1.80 2.00 75 60 3650
16 Infosystems
04-10- Kajaria 2 1 699.3 670.05 727.85 107866 115932 138062
16 Ceramic 5
22-09- Rollatainers 2 1 17.80 15.13 16.50 3498773 2748854 171985
16
21-09- JMT Auto 2 1 25.50 23.40 27.46 164853 54276 47561
16
12-09- MindaInd 10 2 290.7 248.61 279.50 35556 10205 57474
16 0
12-09- Trent 10 1 241.4 209.77 210.15 302622 79280 64785
16 5
08-09- Bajaj Finance 10 2 1612. 1005.36 1126.5 1604933 437540 1160432
16 80 0
06-09- ChembondCh 10 5 240.8 220.40 233.00 2031 1412 6689
16 em 5
30-08- V-Guard Ind 10 1 135.2 121.26 129.82 396580 16702 21154
16 5
24-08- PilItalica 4 1 10.10 8.56 9.81 137913 101748 171994
16
12-08- PNC Infratech 10 2 113.3 115.56 121.45 6283 7025 45301
16 0
11-08- Kesar 10 5 266.1 280.25 279.80 824 4002 91419
16 Terminals 5
26-07- Lloyds Metals 2 1 14.90 14.18 16.08 103928 37880 157008
16
13-07- Solar Ind 10 2 649.4 629.69 654.30 2859 3405 4341
16 0
06-06- Lux Industries 10 2 693.0 672.56 655.55 2778 1180 1051
16 5
Companies In India
02-06- NBCC (India) 10 2 131.5 131.17 123.41 1098731 818052 549198

16 4
13-05- Transcorp Intl 10 2 14.95 10.84 13.80 1511 15 6614
16
09-05- Amba 10 5 111.0 88.95 110.41 29724 22681 14906
16 Enterprise 0
07-04- ABM 10 5 102.3 101.95 109.50 9470 1002 1910
16 Knowledge 0
06-04- Vivimed Labs 10 2 86.60 79.92 84.60 72020 97560 14319
16
22-03- Synthiko Foils 10 5 20.95 21.40 19.80 52 2 25
16
21-03- Welspun India 10 1 97.65 85.07 93.20 734310 1106900 521642
16
21-03- Precision 10 5 76.60 70.20 73.10 17162 6770 841
16 Wires
16-03- Tide Water 10 5 7109. 5820.50 6555.0 9993 2896 1640
16 Oil 00 0
14-03- Rama Steel 10 5 88.25 90.05 85.25 67009 19240 23679
16 Tube
03-03- PrakashSteela 10 1 9.40 10.23 7.70 84,644 9720 23557
16 g
25-02- Bhandari 10 1 3.75 4.34 4.40 417693 148136 579751
16 Hosier
25-02- Sequent 10 2 165.2 156.10 174.70 9456 111710 22864
16 Scientific 5
18-02- Vegetable 10 1 4.70 4.02 5.28 3624 434454 260222
16 Prod
17-02- Mold-Tek 10 5 120.6 140.35 118.80 52931 13434 17155
16 Pack 0
17-02- MoldTek 10 2 93.25 117.70 90.80 7693 29840 20532
16 Technologies
07-01- Stampede Cap 10 1 36.96 35.05 29.12 525818 188738 2335814
16
06-01- GreenplyInd 5 1 200.8 182.94 171.55 29551 2220 8742
16 0
26-12- Jindal 10 5 577.3 605.93 573.55 25117 21842 45921
17 Worldwide 5
22-12- Premier Pipes 10 5 2.33 0000 2.44 400 0000 10
17
Companies In India
14-12- Advik 10 1 3.49 3.50 3.40 1146 3100 50

17 Industries
04-12- Universal Sec 5 1 9.05 9.50 6.85 530173 50005 104124
17
29-11- Akar Auto 10 5 75.15 59.70 73.55 28744 19340 21531
17 Indus
09-11- IGL 10 2 309.9 314.22 312.25 2378295 1760905 1559253
17 5
01-11- ShriJagdamba 10 1 153.3 140.50 153.30 100 820 20
17 Polymers 4
30-10- Atlas Cycles 10 5 214.8 210.70 210.60 2405 4592 2711
17 5
25-10- Siyaram Silk 10 2 575.4 468.92 580.15 3907 1475 1134
17 0
24-10- Vishal Fabrics 10 5 235 232.00 249.00 20000 2500 21250
17
18-10- Pokarna 10 2 211.8 207.87 219.55 9300 1550 5601
17 0
12-10- Can Fin 10 2 526 519.90 495.70 651990 481050 847741
17 Homes
10-10- Heritage 10 5 783.0 724.25 773.75 7072 18422 2858
17 Foods 5
05-10- Jamna Auto 5 1 55.35 54.69 59.35 320358 639415 142786
17
28-09- Trans &Electr 10 1 31.75 30.58 30.20 96607 199800 26851
17
27-09- ElproInt 2 1 43.01 45.02 44.33 24484 17923 4963
17
26-09- Sutlej Textiles 10 1 89.25 88.80 87.20 15840 20770 40128
17
22-09- Safari Ind 10 2 400.9 310.00 362.65 18463 50 2382
17 5
21-09- Yes Bank 10 2 377.0 358.79 365.80 7307710 9434255 4977073
17 5
15-09- NESCO 10 2 569.7 474.68 582.05 9655 4280 2309
17 0
14-09- Borosil Glass 10 1 951.7 935.95 835.35 26122 24590 9648
17 0
11-09- Deccan 10 5 589.5 559.05 575.00 18924 1300 6109
17 Cements 0
31-08- InfibeamIncor 10 1 149.6 143.57 146.57 16417512 5158370 3904855
Companies In India
17 p 5
31-08- Dollar Ind 10 2 477.1 2088.80 419.85 124113 2232 94413
17 5
10-08- Dwarikesh 10 1 65.95 47.81 66.20 905236 1438840 483309
17 Sugar
03-08- Coral India 10 2 6320 51.94 63.50 7717 6245 2610
17 Fin
27-07- Sai Baba 10 1 39.01 53.68 28.90 390429 558956 168684
17 Invest
25-07- Sunteck 2 1 240.7 240.75 254.90 123353 56774 551808
17 Realty 0
19-07- Navin 10 2 671.5 604.23 728.30 93119 12435 200658
17 Fluorine 0
22-06- Arcotech 10 2 80.85 70.91 70.85 431130 221525 442922
17
25-05- Advanced 10 2 402.7 392.42 357.00 217443 63615 28373
17 Enzyme 5
25-05- Hind 10 5 688.0 652.97 638.10 4127 8227 3779
17 Composites 0
04-05- Beardsell 10 2 86.85 65.58 81.30 1959 2934 2591
17
28-04- DwekamIndus 10 1 22.00 16.70 24.70 100 50 2582
17 tri
26-04- BLS 10 1 169.1 150.77 191.20 72534 82030 43515
17 Internation 0
16-03- Bharat Elec 10 1 150.1 138.29 142.50 15062971 4441793 5987805
17 4
09-03- ViaanInd 10 1 17.55 12.92 18.10 22934 56500 182255
17
27-02- Nutraplus 10 5 30.50 61.00 27.00 140508 61 117540
17 India
17-02- Dwitiya 10 2 289.0 285.60 290.40 38600 5 47803
17 Trading 0
16-02- Compuage 10 2 59.00 48.00 47.80 40397 149110 7320
17 Info
10-02- Gayatri 10 2 150.7 128.96 138.80 253674 990 7829
17 Project 0
07-02- LT Foods 10 1 50.75 37.78 53.25 587794 401450 85098
17
02-02- Kallam 10 2 20.80 19.20 19.64 75795 42488 101231
Companies In India
17 Spinning
30-01- Ushdev Intl 10 1 20.70 19.75 15.60 8584 64950 194558
17
09-01- Sterling Tools 10 2 196.2 171.80 185.90 21851 490 4809
17 5
04-01- JSW Steel 10 1 163.0 159.16 192.65 2378943 4756710 5325171
17 5
Stock Price and Trading Volume a day before and a day after stock split of the
companies gone for Stock Split during 2015-2017
Split Company Old New Share Price Share Volume Volume traded
Date FV FV a day before Price a traded day day after
Share Spilt day after before Share Split
Share Share Split
Split
28-12- ChamanLalSetia 10 2 57.04 57.00 2624 11
15 Exports Ltd.
22-12- MFL India 10 1 0.65 0.83 996890 808254
15
21-12- Indian Terrain 10 2 145.75 156.50 18080 34211
15
17-12- SMS Pharma 10 1 97.45 124.75 64030 511038
15
16-12- Setco Auto 10 2 44.76 44.60 155895 19877
15
16-12- Citizen Yarns 10 5 21.65 21.65 600 13357
15
16-12- Noble Polymers 10 5 10.63 11.60 668 90952
15
15-12- Jackson Invt 10 1 23.90 23.90 29000 40000
15
14-12- Khoobsurat 10 1 3.46 3.70 22530 24
15
10-12- J Kumar Infra 10 5 369.40 343.55 4264 17417
15
03-12- Jamna Auto 10 5 23.67 25.10 762360 1751545
15
02-12- Sharp Invest 10 1 6.13 6.50 1200 30
15
Companies In India
02-12- Vivid Global 10 5 10.00 10.50 510 53

15
26-11- VitanAgro 10 1 17.47 17.47 75020 0000
15
26-11- NatcoPharma 10 2 515.72 528.85 123355 164262
15
26-11- Avanti Feeds 10 2 527.96 502.00 104235 32119
15
26-11- Assoc Stone 5 1 13.34 13.40 88219 80230
15
06-11- Shilpa 2 1 473.33 507.90 17012 25338
15
30-10- Diligent Ind 10 5 18.15 23.45 40 2794
15
30-10- Kesar Petro 10 1 49.46 54.35 48470 5255
15
29-10- SarlaPerforman 10 1 51.50 25.50 14270 31939
15
15-10- Mudunuru 10 2 39.68 42.10 25005 2
15
15-10- Lambodhara Text 10 5 343.63 342.60 62784 15508
15
07-10- Bata India 10 5 549.48 545.05 379928 155661
15
06-10- Cadila Health 5 1 420.21 423.20 1411775 657983
15
05-10- ToyamInd 10 1 44.11 44.30 360630 243430
15
23-09- Alankit 10 2 10.65 10.15 731380 484324
15
22-09- Samtex Fashions 10 2 14.98 15.00 42300 9750
15
16-09- Aegis Logistics 10 1 81.46 93.35 93260 755102
15
16-09- Urja Global 10 1 3.01 3.35 820700 116244
15
03-09- Kushal 10 2 15.70 16.50 20000 20000
15
21-08- ITD Cementation 10 1 81.98 77.50 60950 50492
15
17-08- Signet Ind 10 1 34.48 42.70 241570 107470
Companies In India
15
16-07- High Ground Ent 10 1 39.02 40.00 329340 1582100
15
02-07- Birdhi Chand 10 1 51.58 55.00 100 5
15
25-06- JMT Auto 10 2 14.64 20.90 8190 406614
15
12-06- ASIS Logistics 100 1 18.94 20.00 8500 1100
15
11-06- FineotexChem 10 2 35.68 33.40 169015 16609
15
04-06- Sunstar Realty 10 1 40.12 40.80 129000 72000
15
04-06- ElproInt 10 2 28.12 25.29 79847 9187
15
04-06- Rollatainers 10 2 35.58 35.45 51510 10022
15
21-05- KkalpanaInd 10 2 25.52 24.30 74080 22753
15
11-05- Rasi Electrodes 10 2 13.65 13.65 81170 8493
15
23-04- Titagarh Wagons 10 2 116.99 103.65 2745260 1081245
15
23-04- Indag Rubber 10 2 193.85 191.50 44560 19823
15
16-04- PittiLaminatio 10 5 66.00 72.90 43750 61674
15
16-04- Arnold Holdings 10 2 10.63 10.55 636465 122206
15
09-04- Menon Bearings 5 1 24.92 31.58 21445 93473
15
30-03- KSS 10 1 0.37 0.41 11902160 3622399
15
21-03- Kansai Nerolac 10 1 217.14 219.20 24860 13728
15
25-03- Panafic Industries 10 1 11.5 12.60 2 2
15
23-03- Granules India 10 1 92.03 86.40 2436200 688317
15
20-03- Ajanta Pharma 5 2 1220.90 1145.60 165570 101292
15
Companies In India
19-03- Tech Mahindra 10 5 700.13 678.30 15227544 3616042

15
16-03- Monotype India 10 1 15.09 15.70 2020 7
15
11-03- Aplaya Creation 10 1 47.83 46.90 457060 530742
15
02-03- Channel Nine 10 1 42.86 35.55 145000 412500
15
27-02- Amines Plast 10 2 17.55 19.10 23510 37936
15
27-02- Hikal 10 2 144.80 144.75 5430 1921
15
26-02- Grandma Trading 10 1 17.86 17.60 742580 130251
15
20-02- HPC Bio 10 1 47.20 46.90 57000 6000
15
18-02- ZydenGentec 10 2 44.40 44.80 300000 92500
15
18-02- YaminiInvt 10 1 54.95 57.60 30 1
15
09-02- Him Fibres 10 1 8.32 9.10 85950 10048
15
02-02- Poly Medicure 10 5 251.07 263.88 17756 16598
15
23-01- Tata Coffee 10 1 100.44 0000 853560 0000
15
22-01- Corporation Bk 10 2 77.67 72.05 4329750 840370
15
22-01- Bank of Baroda 10 2 225.58 223.10 13617875 4098897
15
21-01- RS Software 10 5 301.08 279.05 163162 66582
15
08-01- Eco Friendly 10 1 50.10 50.30 20000 70000
15
08-01- Berger Paints 2 1 155.61 174.69 2259790 3407865
15
06-01- Hathway Cable 10 2 69.73 66.40 206710 1372429
15
27-12- Gulshan Poly 5 1 73.97 73.55 2765 3563
16
21-12- Shree Global 5 1 3.32 3.31 38735 20878
Companies In India
16
15-12- Alankit 2 1 32.10 37.10 487554 746779
16
13-12- KNR Construct 10 2 802.65 168.80 802 7211
16
08-12- SatkarFinlease 10 1 8.47 8.40 51780 26659
16
01-12- Sunil HitechEng 10 1 10.11 11.13 8526480 114760
16
29-11- MangalamInd 10 1 2.44 2.35 62800 63125
16
29-11- KPR Mill 10 5 561.73 599.65 10020 33166
16
23-11- Capri Global 10 2 55.11 57.85 19575 10
16
17-11- KarurVysya 10 2 84.78 84.83 82671 42967
16
11-11- Indo Count 10 2 160.15 144.35 110635 68178
16
10-11- Inani Marbles 10 2 54.27 59.70 2135 60
16
02-11- VamaInd 10 2 16.26 16.80 244335 72773
16
28-10- Gold Line 10 1 27.02 26.50 510 51
16
26-10- BhageriaIndu 10 5 355.68 392.05 196964 90055
16
25-10- Viji Finance 10 1 16.37 17.13 115314 158441
16
25-10- NegotiumInt 10 1 89.10 84.25 1130 53680
16
25-10- VKJ Infra 10 1 9.25 9.38 34027 58619
16
20-10- Menon Pistons 10 1 22.18 22.85 221510 141280
16
20-10- Sinner Energy 10 1 5.85 6.25 92100 209726
16
19-10- Caplin Labs 10 2 291.22 351.50 26370 82350
16
13-10- SresthaFinvest 10 2 5.80 5.80 70 250
16
Companies In India
13-10- Gyscoal Alloys 10 1 12.22 13.80 1215930 354738

16
10-10- Pact Industries 10 1 6.99 6.35 281070 41623
16
10-10- 8K Miles Soft 10 5 752.42 793.70 42523 15384
16
06-10- Grasim 10 2 986.71 1024.95 580355 641501
16
04-10- Diamond Info 10 1 1.89 0000 2250 0000
16
04-10- Kajaria Ceramic 2 1 699.29 708.95 168776 40972
16
22-09- Rollatainers 2 1 16.00 18.75 6539896 2348322
16
21-09- JMT Auto 2 1 24.15 28.50 942002 559358
16
12-09- MindaInd 10 2 304.53 314.53 44240 187842
16
12-09- Trent 10 1 234.48 239.80 111170 84476
16
08-09- Bajaj Finance 10 2 1139.33 1153.55 2519340 758416
16
06-09- ChembondChem 10 5 222.48 245.60 3250 5799
16
30-08- V-Guard Ind 10 1 127.49 136.04 266112 192910
16
24-08- PilItalica 4 1 9.68 10.60 445404 101698
16
12-08- PNC Infratech 10 2 114.10 114.15 102050 6244
16
11-08- Kesar Terminals 10 5 261.04 248.25 8914 7776
16
26-07- Lloyds Metals 2 1 14.20 14.60 71608 30657
16
13-07- Solar Ind 10 2 649.36 692.05 2950 80105
16
06-06- Lux Industries 10 2 699.80 680.20 2345 1038
16
02-06- NBCC (India) 10 2 129.37 130.81 2518742 465172
16
13-05- Transcorp Intl 10 2 14.95 14.25 11605 1373
Companies In India
16
09-05- Amba Enterprise 10 5 103.87 116.00 61954 52212
16
07-04- ABM Knowledge 10 5 103.05 112.20 5102 3200
16
06-04- Vivimed Labs 10 2 83.54 87.80 119575 26549
16
22-03- Synthiko Foils 10 5 20.95 0000 104 0000
16
21-03- Welspun India 10 1 93.67 97.60 6055660 362664
16
21-03- Precision Wires 10 5 74.30 75.90 34338 1710
16
16-03- Tide Water Oil 10 5 7333.75 6790.00 23904 1886
16
14-03- Rama Steel Tube 10 5 87.30 90.50 347510 27854
16
03-03- PrakashSteelag 10 1 7.89 11.15 87300 128095
16
25-02- Bhandari Hosier 10 1 3.31 3.50 336050 300098
16
25-02- Sequent Scienti 10 2 157.90 167.50 22085 15493
16
18-02- Vegetable Prod 10 1 4.66 4.80 46975 4597
16
17-02- Mold-Tek Pack 10 5 124.35 123.90 10788 28876
16
17-02- MoldTek Tech 10 2 96.35 97.75 41540 8124
16
07-01- Stampede Cap 10 1 37.21 36.88 1031963 1554385
16
06-01- GreenplyInd 5 1 197.70 193.50 9500 5459
16
26-12- Jindal Worldwide 10 5 576.98 579.35 46422 31352
17
22-12- Premier Pipes 10 5 2.33 0000 800 0000
17
14-12- Advik Industries 10 1 3.49 3.6 11460 2
17
04-12- Universal Credit & 5 1 9.05 8.85 530173 634791
17 Securities
Companies In India
29-11- Akar Auto Indus 10 5 73.05 72.15 20100 15303

17
09-11- IGL 10 2 313.65 321.65 2151685 2941430
17
01-11- JagdambaPolyme 10 1 153.34 153.30 1000 1
17
30-10- Atlas Cycles 10 5 204.65 225.55 4484 10221
17
25-10- Siyaram Silk 10 2 558.38 580.35 3745 4532
17
24-10- Vishal Fabrics 10 5 235.00 245.10 40000 1250
17
18-10- Pokarna 10 2 208.91 211.00 5945 3114
17
12-10- Can Fin Homes 10 2 510.66 558.75 622765 1585443
17
10-10- Heritage Foods 10 5 766.70 792.60 7992 3300
17
05-10- Jamna Auto 5 1 54.10 62.10 335860 1158613
17
28-09- Trans &Electr 10 1 30.72 33.05 76200 309009
17
27-09- ElproInt 2 1 43.42 42.27 22929 1738
17
26-09- Sutlej Textiles 10 1 89.40 89.00 26830 7246
17
22-09- Safari Ind 10 2 353.73 395.35 3460 6059
17
21-09- Yes Bank 10 2 376.02 360.65 6049650 12176561
17
15-09- NESCO 10 2 567.25 578.50 17445 6117
17
14-09- Borosil Glass 10 1 955.90 905.20 42880 17259
17
11-09- Deccan Cements 10 5 580.78 605.15 38078 8855
17
31-08- InfibeamIncorp 10 1 147.03 143.40 6289780 4677647
17
31-08- Dollar Ind 10 2 2344.65 458.50 16372 46502
17
10-08- Dwarikesh Sugar 10 1 66.75 7.80 4396210 733998
Companies In India
17
03-08- Coral India Fin 10 2 301.00 65.55 1925 23788
17
27-07- Sai Baba Invest 10 1 33.58 43.00 54460 295601
17
25-07- Sunteck Realty 2 1 236.48 244.80 102618 133078
17
19-07- Navin Fluorine 10 2 657.22 673.75 56865 56572
17
22-06- Arcotech 10 2 84.28 96.45 286360 914881
17
25-05- Advanced Enzyme 10 2 371.43 406.50 43230 59037
17
25-05- Hind Composites 10 5 645.27 692.80 10660 1753
17
04-05- Beardsell 10 2 82.76 91.15 86134 27501
17
28-04- Dwekam Industries 10 1 21.00 23.10 186740 201
17
26-04- BLS International 10 1 167.75 161.65 274910 40008
17
16-03- Bharat Elec 10 1 142.70 146.91 4147400 6768529
17
09-03- ViaanInd 10 1 14.67 18.40 447400 602354
17
27-02- Nutraplus India 10 5 30.83 30.30 74988 60516
17
17-02- Dwitiya Trading 10 2 294.66 274.55 20790 30808
17
16-02- Compuage Info 10 2 59.10 57.30 28995 9278
17
10-02- Gayatri Project 10 2 144.72 144.75 17485 145
17
07-02- LT Foods 10 1 46.95 60.90 1115470 1553353
17
02-02- Kallam Spinning 10 2 19.80 21.56 198106 46503
17
30-01- Ushdev Intl 10 1 21.76 19.70 291430 62736
17
09-01- Sterling Tools 10 2 189.57 193.65 14840 4244
17
Companies In India
04-01- JSW Steel 10 1 164.46 175.65 4530490 6510132

17
Stock Price and Trading Volume 15 days before andn15 days after of the companies who had
gone for stock split during 2015-2017
Date Company Old New Share Share Share Volume Volume Volume
FV FV Price on Price 15 Price 15 Traded on traded 15 traded 15
the date days days after the date of days before days after
of stock before stock split stock split stock split stock split
split stock split
21/9/17 Yes Bank Ltd 10 2 377.05 358.79 365.80 7307710 9434255 4977073
9/11/17 Indraprastha 10 2 309.95 314.22 312.25 2378295 1760905 1559253
Gas
12/10/17 Can Fin Homes 10 2 526 519.90 495.70 651990 481050 847741
04/01/17 JSW Steel 10 1 163.05 159.16 192.65 2378943 4756710 5325171
25/07/17 Sunteck Realty 2 1 240.70 240.75 254.90 123353 56774 551808
08/09/16 Bajaj Finance 10 2 1612.8 1005.36 1126.5 1604933 437540 1160432
12/09/16 Trent Ltd 10 1 241.45 209.77 210.15 302622 79280 64785
16/03/17 Bharat 10 1 150.14 138.29 142.50 15062971 4441793 5987805
Electronics
19/07/17 NavinFlourine 10 2 671.50 604.23 728.30 93119 12435 200658
31/08/17 Infibeam 10 1 149.65 143.57 146.57 16417512 5158370 3904855
Incorporation
21/03/16 Welspun India 10 1 97.65 85.07 93.20 734310 1106900 521642
02/06/16 NBCC 10 2 131.54 131.17 123.41 1098731 818052 549198
04/10/16 Kajaria Ceramic 2 1 699.35 670.05 727.85 107866 115932 138062
06/10/16 Grasim 10 2 1009.2 973.73 971.70 1278041 514070 295511
Industries
26/11/15 Natco 10 2 543.85 491.88 532.60 1087976 98070 432875
26/11/15 Avanti 10 2 502 518.76 470.65 32119 13530 28948
07/10/15 Bata India 10 5 549.75 564.60 525.85 230255 640202 343193
06/10/15 Cadila Health 5 1 423.20 387.86 443.10 657983 652400 2948880
16/09/15 Aegis Logistics 10 1 80.60 79.50 88.30 124901 113230 255856
23/04/15 Titagarh 10 2 103.65 121.43 92.55 1081245 1688580 527023
23/03/15 Granules India 10 1 86.40 82.01 90.55 688317 1779000 1260157
20/03/15 Ajanta 5 2 1130.8 1198.48 1315.45 239544 115125 162965
19/03/15 Tech Mahindra 10 5 678.30 790.54 652.85 3616042 1725044 1922672
22/01/15 Corporation 10 2 74.30 64.84 64.30 1547731 362705 319513
Bank
Companies In India
22/01/15 Bank Of Baroda 10 2 223.10 213.34 177.55 4098897 3479130 6190147

08/01/15 Berger Paints 2 1 174.69 144.40 160.48 3407865 701999 686795
06/01/15 Hathway Cable 10 2 66.40 66.44 64.85 1372429 176145 1335985
Stock Price and Trading Volume of the Companies of group Aa day before and day
after stock split.
Date Name Of The Company Share Price Share Price a Share Price Volume Volume Volume
on the date day before a day after Traded on traded day traded day
of stock Share Spilt Share Split the date of before after Share
split stock split Share Split Split
21/9/17 Yes Bank Ltd 377.05 376.02 360.65 7307710 6049650 12176561
9/11/17 Indraprastha Gas 309.95 313.65 321.65 2378295 2151685 2941430
12/10/17 Can Fin Homes 526 510.66 558.75 651990 622765 1585443
04/01/17 JSW Steel 163.05 164.46 175.65 2378943 4530490 6510132
25/07/17 Sunteck Realty 240.70 236.48 244.80 123353 102618 133078
08/09/16 Bajaj Finance 1612.80 1139.33 1153.55 1604933 2519340 758416
12/09/16 Trent Ltd 241.45 234.48 239.80 302622 111170 84476
16/03/17 Bharat Electronics 150.14 142.70 146.91 15062971 4147400 6768529
19/07/17 NavinFlourine 671.50 657.22 673.75 93119 56865 56572
31/08/17 Infibeam Incorporation 149.65 147.03 143.40 16417512 6289780 4677647
21/03/16 Welspun India 97.65 93.67 97.60 734310 6055660 362664
02/06/16 NBCC 131.54 129.37 130.81 1098731 2518742 465172
04/10/16 Kajaria Ceramic 699.35 699.29 708.95 107866 168776 40972
06/10/16 Grasim Industries 1009.20 986.71 1024.95 1278041 580355 641501
26/11/15 Natco 543.85 515.72 528.85 1087976 123355 164262
26/11/15 Avanti 502 527.96 502.00 32119 104235 32119
07/10/15 Bata India 549.75 549.48 545.05 230255 379928 155661
06/10/15 Cadila Health 423.20 420.21 423.20 657983 1411775 657983
16/09/15 Aegis Logistics 80.60 81.46 93.35 124901 93260 755102
23/04/15 Titagarh 103.65 116.99 103.65 1081245 2745260 1081245
23/03/15 Granules India 86.40 92.03 86.40 688317 2436200 688317
20/03/15 Ajanta 1130.80 1220.90 1145.60 239544 165570 101292
19/03/15 Tech Mahindra 678.30 700.13 678.30 3616042 15227544 3616042
22/01/15 Corporation Bank 74.30 77.67 72.05 1547731 4329750 840370
22/01/15 Bank Of Baroda 223.10 225.58 223.10 4098897 13617875 4098897
08/01/15 Berger Paints 174.69 155.61 174.69 3407865 2259790 3407865
06/01/15 Hathway Cable 66.40 69.73 66.40 1372429 206710 1372429
Companies In India

Rajesh Sharma

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Impact Of Stock Splits On Stock Price And Stock Trading Volume – A Study Of Selected

CH-1 INTRODUCTION TO STOCK SPLITS

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 1

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 2

1.1 DEFINITION OF STOCK SPLIT:

1.2 CONCEPT OF STOCK SPLIT:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 3

A stock split is a procedure that increases or decreases a corporation’s total number of

• Small stock distributions (less than 25%)

• Large stock distributions (greater than 25%).

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 4

Types of Stock Splits:

1. Literal stock splits:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 5

1.3 THEORIES OF STOCK SPLITS:

1.3.1 Signalling Theory:

According to signalling hypothesis, in a scenario of asymmetric information between

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 6

1.3.2 Optimal Trading Range Theory:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 7

1.3.3 Self Serving Management and Dispersion of Control Theory:

1.3.4 Increased Liquidity Theory:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 8

a) Signal: Management team of an exceptionally well performing company with private

• The benefits of the signal are –

o This signal may benefit the firm if it is accompanied with an

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 9

o Pre-split shareholders incur higher aggregate costs resulting from per

d) Increased Number of Trades: The Company’s shareholder base is enlarged;

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 10

1.4 MOTIVATION FOR STOCK SPLIT:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 11

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 12

Infibeam Incorporation: The board of e-commerce firm Infibeam Incorporation approved

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 13

Kajaria Ceramic: The primary motive of the stock-split proposal is to improve the

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 14

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 15

Sonata Software 10:1

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 16

Table 1.2: Number of Stock Splits during 1999-2017

Year Number of Stock Splits

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 17

Chart 1.1: Representing the no of stock splits during 1999-2017

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 18

1.6REGULATORY FRAMEWORK OF STOCK SPLITS IN INDIA:

o Frequent change of face value of shares by listed companies

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 19

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 20

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 21

1.7 PROCEDURAL ASPECTS:

Announcement date, Record date, Payment date and Ex-split date

1.7.1 Steps to Be Followed for Conducting a Stock Split

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 22

1.7.2 Parties Affected by Stock Split Decisions

• Existing shareholders of the splitting firm (pre-split)

• Prospective shareholders of the splitting firm (post-split or post announcement)

1.8WHY DO COMPANIES GO FOR STOCK SPLIT?

1) Availability and Affordability:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 23

1.9 LIMITATIONS OF STOCK SPLITS:

2) Impulsive selling of share:

D. R. Patel and R. B. Patel Commerce College and B. C. Patel BBACollege Page 24

3) Risk of Low share Prices: