How many times can a company split its Stock?

How many times can a company split its stock?
And can a company reverse stock split?
Are there companies which split its stock often?
Thanks in advance.

Till the face-value (FV) of the stock reaches the minimum level. SEBI has defined Rs. 1 as the minimum face value a company can have.

Yes. Generally done in cases where there is a perception among people that this is a low value stock or if the company wants to take out the excess liquidity in the stock.

Even stocks like Wipro, and Infy which are known to announce bonus shares, dividends for years, have done it only once or twice. So, I’m not sure if we have companies who split and reverse split often.

1 Like

is there any rules for face value price at the time of incorporation ?

Minimum FV is 1 and I think there’s no upside limit to what can be the maximum FV.

Other than that, while listing the shares, the company should state the FV while giving the advertisement.

I don’t think there are any particular rules in fact, there was talk about keeping FV standard for all companies by SEBI in the past but somehow there were some legal hassles.

Folks who are CAs or people who are interested in accounts in the forum, what are your thoughts on FV?

1 Like

Don’t you think stocks with higher FV will get lot more investors if their FV is reduced (stock split) for example MRF?
Will this inversely impact the company in anyway? Like FV is the perceived value among public?

Check this out, We have a detailed Varsity post on this topic