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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions

Mr. Iyer holds 1,000 shares of a company in his demat account on the record date for a stock split, where each share of face value Rs 10 is split into two shares of face value Rs 5. After the split he will hold:

He will hold 2,000 shares of Rs 5 each. Splitting each Rs 10 share into two Rs 5 shares doubles the share count while the total face value stays Rs 10,000. The depository credits the new shares, usually under a new ISIN, to his account.

  1. A500 shares of Rs 10 each
  2. B2,000 shares of Rs 5 eachCorrect
  3. C1,000 shares of Rs 5 each
  4. D2,000 shares of Rs 10 each

Explanation

A split of one Rs 10 share into two Rs 5 shares doubles the number of shares: 1,000 x 2 = 2,000 shares. Face value halves to Rs 5, so total face value remains Rs 10,000 (2,000 x 5). Keeping Rs 10 face value would wrongly increase total capital.

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