Margin stocks query

If I have pledged 1000 shares of a stock and it is going to split in 1:5 . So after the split will all 5000 shares will be pledged or 4000 shares will be credited to my account with total collateral margin now reduced?

1 Like

In case of Aarti Industries the shares which were credited to my Demat were automatically pledged. Actually even I expected then to be shown in kite. But no.

Going by logic, the entire lot of new shares after split must and should be pledged. The reason being, the value of the stocks falls proportionately after the split or bonus shares are issued. If the pledge is not in place for the entire new quantity, the bank or institution who has granted facilities will have a LTV shortfall.

Hence I am 100% sure, the entire quantity will be pledged automatically.