Bonus, Split and Dividend: What Corporate Actions Mean for Your Holdings
Published 2026-10-16 · Aadarna Stock Broking Pvt. Ltd.
Key takeaways
- A bonus issue or stock split increases the number of shares you hold but does not change the total value you own.
- A dividend is a payment from the company's profits, credited to your bank account.
- To be eligible, you must hold the shares as of the record date; the ex-date tells you the last day to buy.
- Benefits reach you automatically through your demat account and linked bank account.
Companies sometimes announce corporate actions that change the shares you hold or pay you money. The most common are bonus issues, stock splits and dividends. They are often misunderstood, especially the idea that a bonus or split makes you richer. This guide explains what really happens.
Record date and ex-date
Every corporate action has a record date: the date on which the company checks who its shareholders are. Only those on the record get the benefit.
The ex-date is the date from which the share trades without the benefit. If you buy on or after the ex-date, you will not get that particular bonus, split or dividend. Under T+1 settlement, the ex-date and record date are usually the same trading day, so you need to have bought the share before the ex-date.
Exchanges publish these dates on their corporate announcements pages.
Bonus issue
In a bonus issue, the company gives existing shareholders extra shares, without any payment from them, in a fixed ratio, using its reserves. The share price adjusts downwards on the ex-date to reflect the larger number of shares.
For example, suppose you hold 100 shares priced at ₹600 each, worth ₹60,000 in total, and the company announces a 1:1 bonus. After the bonus you hold 200 shares, and the price adjusts to around ₹300. Your total value is still around ₹60,000.
Stock split
In a split, each share is divided into smaller shares with a lower face value. The effect on your holding is similar to a bonus: more shares, lower price per share, same total value.
For example, say a share with a face value of ₹10 is split into five shares of ₹2 each. If you held 10 shares at ₹1,000, you would hold 50 shares at around ₹200 after the split.
Companies often do bonuses or splits to make each share more affordable and easier to trade. Neither changes the company's business or the value of your stake on its own.
Dividend
A dividend is a payment the company makes to shareholders out of its profits. It is declared per share, and the money is credited to the bank account linked to your demat account.
On the ex-date, the share price usually adjusts down by roughly the dividend amount, because that money is leaving the company. Dividends are taxable in the hands of the shareholder as per income tax rules, and the company may deduct tax at source.
How benefits reach you
- Bonus and split shares are credited automatically to your demat account after the record date.
- Dividends are credited to the bank account registered with your demat account.
- If a dividend does not arrive, check that your bank details are correct and updated with your Depository Participant.
- Unclaimed dividends can eventually be transferred to the Investor Education and Protection Fund (IEPF), from where they have to be claimed back. Keeping your details updated avoids this.
Frequently asked questions
Does a bonus or split mean the company is doing well?
Not by itself. These actions change the number of shares and the price per share, not the value of the business. Judge a company on its fundamentals and documents, not on corporate actions.
If I sell on the ex-date, do I still get the dividend?
Generally yes, if you held the shares before the ex-date, because you were the shareholder on record. The buyer on the ex-date does not get it.
Why did my holdings value drop on the ex-date?
The price adjusts for the benefit. After a bonus or split you have more shares at a lower price; after a dividend the cash comes to your bank account separately.