Stock Split and Bonus Share Calculator
Stock Split and Bonus Share Calculator
How many shares you hold after a stock split or a bonus issue, the price the market adjusts to, and your new average cost per share. The value of your holding does not change.
Shares after a split or bonus
100 shares of $10 face value split into $2 face value; price $2,500; your average cost $2,000
The adjustment factor
- F
- the factor that multiplies the number of shares and divides the price
- A:B
- A new shares for every B held. A 1:1 bonus doubles your shares; 1:2 adds one for every two.
Worked example
100 shares of $10 face value split into $2 face value; price $2,500; your average cost $2,000
F = 10 ÷ 2 = 5, a 1-into-5 split
Shares after = 100 × 5 = 500
Theoretical price = 2,500 ÷ 5 = $500; average cost = 2,00,000 ÷ 500 = $400
Value before 100 × 2,500 = $2,50,000; after 500 × 500 = $2,50,000, unchanged
As a 1:1 bonus instead: F = (1 + 1) ÷ 1 = 2, so 200 shares at $1,250, average cost $1,000; face value stays $10
Common ratios on a holding of 100 shares at 2,500
| Action | Factor | Shares after | Price after |
|---|---|---|---|
| Split $10 → $5 | 2 | 200 | $1,250.00 |
| Split $10 → $2 | 5 | 500 | $500.00 |
| Split $10 → $1 | 10 | 1,000 | $250.00 |
| Bonus 1:2 | 1.5 | 150 | $1,666.67 |
| Bonus 1:1 | 2 | 200 | $1,250.00 |
| Bonus 2:1 | 3 | 300 | $833.33 |
Record date, ex-date, and cost for tax
A stock split and a bonus issue both give you more shares without your paying anything, and both cut the share price in the same proportion. The difference is on the company’s books. A split divides each share into several of a smaller face value: $10 into five of $2. A bonus issue keeps the face value and turns part of the company’s reserves into new shares handed out in a ratio such as 1:1, one new share for every one held. SEBI’s investor-education material gives the price adjustment for an A:B bonus as (A + B) ÷ B. Neither makes you richer: you own the same slice of the same company, cut into more pieces. What can change is liquidity, as a lower price per share is easier to trade in small amounts.
Record date and ex-date. The company fixes a record date; shareholders in the depository records at the end of that day receive the shares. Because Indian exchanges settle trades on T+1, the share normally goes ex, trading at the adjusted price without the entitlement, on the record date itself, so you must have bought by the trading day before. Since 1 October 2024 SEBI requires bonus shares to be credited the day after the record date and to be tradable the day after that. Check the company’s stock-exchange announcement for the actual dates.
Cost for tax. The average cost on this page is the economic one: what you paid, spread over all the shares you now hold. For a split, the usual tax treatment is the same, with the original cost spread over the new shares. A bonus is different. Under the Income-tax Act, 1961 (section 55(2)(aa)(iiia)), bonus shares are taken to have cost nothing and your original shares keep their full cost, so selling the bonus shares can create a gain equal to their whole sale price. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbers its sections; other rules, such as those for shares held before 1 February 2018, can also change the figure, so check with your statement or a tax adviser. To track purchases at different prices, use the stock average calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
What happens to my shares in a stock split?
You get more shares of a smaller face value and the price falls in proportion. 100 shares at $10 face value split into $2 become 500 shares, and a price of 2,500 becomes about 500.
How is the share price adjusted after a bonus issue?
Divided by (A + B) ÷ B for an A:B bonus. After a 1:1 bonus the price halves and your shares double, so the holding’s value is unchanged.
Do I need to hold shares on the record date or the ex-date?
You need to be a shareholder in the records at the end of the record date. With T+1 settlement the ex-date is normally the record date itself, so buy by the trading day before.
What is the cost of bonus shares for tax?
Under the Income-tax Act, 1961, nil: the original shares keep their full cost. For a split the original cost is normally spread over the new shares. The 2025 Act renumbers these rules from 1 April 2026; check the current position.
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References
- Securities and Exchange Board of India (SEBI), investor education: “Corporate Actions: Bonus, Stock Split and Dividends” (investor.sebi.gov.in). Record date; bonus keeps face value, split reduces it in proportion; price adjustment factor (A + B) ÷ B.
- SEBI circular no. 122 of 16 September 2024, “Enabling T+2 trading of bonus shares where T is the record date”, applicable from 1 October 2024: bonus shares deemed allotted on T+1 and available for trading on T+2.
- SEBI circular SEBI/HO/MRD2/DCAP/P/CIR/2021/634 of 7 September 2021 introducing T+1 settlement on an optional, phased basis; all listed shares on the T+1 cycle from 27 January 2023 (NSE circular, revised settlement calendar for 27, 30 and 31 January 2023).
- Income-tax Act, 1961, section 55(2)(aa)(iiia): cost of acquisition of a financial asset allotted without payment (such as bonus shares) taken as nil. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026.