Can an index like the Bank Nifty be split in the same way as individual stocks, and what would be the potential consequences if such a split were to occur? Additionally, is there any other way to modify the composition of an index like the Bank Nifty that could affect its performance?
I don’t know anything about BN but I think if BN becomes too big to handle technically, maybe they can be a split. On the other hand, Nifty is the most traded, so they can handle BN too even if it gets too big.
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Unlike individual stocks, major indices like the typically do not undergo splits. Instead, they are adjusted periodically to ensure they accurately represent the underlying market. This adjustment might involve adding or removing companies from the index, changing weightings, or making other modifications to maintain its relevance and representativeness. Therefore, it’s essential to clarify that while individual stocks within the index may undergo splits, the index itself does not typically split like individual stocks.