How does a investor and promotor benefit from a share split ( face value reduction)?
As a investor, you have the same capital split into multiples - In case of Dividend, an investor might be benefited. Same with value appreciation but the increase in affordability might result in more demand coming in from retail investors(assumption being D/FII will buy irrespective of the cost of the share before and after split). But again retail holding of most companies is so less to affect any real value appreciation
Promoters - ? All i can think of is that, It increases the affordability of the stock and liquidity. Does the promoters get any money as a result of stock split?
You are correct mystique, the only benefit of a stock split is that it becomes cheaper to buy 1 share, and hence the liquidity in the stock might go up. You hold 1 share of Rs 1000 or 2 shares of Rs 500, there is no benefit you get as an investor.
If say tomorrow, INFY is split in the ratio of 1:10, will you not invest in infosys, as soon the stock split occurs?
That answers your question. I have seen you have already captured all these points in your question.
Since the affordability of the stock increases, you can see more and more retail investor start pouring in and the share will again get a boost (will create a demand)
There could be another benefit, since the number of shares you hold has increased, for long term investers, it might yield better dividend sums.