Split vs bonus (investor view)
Both can increase the number of shares you hold without you sending more money. Neither is free profit by itself — the market price usually adjusts so total value is roughly unchanged at the event.
| Stock split | Bonus issue | |
|---|---|---|
| Typical notation | 1→2 (one becomes two) | 1:1 (one free per one held) |
| Cash from you | None | None |
| Cost basis (total) | Unchanged | Unchanged |
| Cost per share | Falls | Falls |
| Share count | Rises by the split ratio | Rises by the bonus ratio |
Worked split
You hold 100 shares bought for ₹10,000 total. A 1→2 split happens.
- Shares → 200
- Cost basis still ₹10,000
- Cost/share → ₹50 (was ₹100)
If the post-split price is ₹55, market value is ₹11,000 — the gain came from the price move, not the split math.
Worked bonus (1:1)
You hold 100 shares. Bonus 1:1 (one bonus for each held).
- New shares = 100 + floor(100 × 1/1) = 200
- Total cost basis unchanged
Same idea as a 1→2 economic split for share count; the corporate paperwork differs.
Model it on Tools.Town
Use the Stock Investment Return Calculator → add a Split or Bonus corporate action → read the timeline and final share count.