Business, Management and Accounting
8 years ago

Stock splits in India boost share liquidity and attract new investors.

SSRN Electronic Journal
Managerial Motives for Stock Splits: Survey Based Evidence from India
Chhavi Mehta, Surendra S. Yadav, Pawan Jain

Paper Summary

Managers in India use stock splits to make trading easier and attract more investors. They believe that splitting stocks helps increase trading activity and makes shares more appealing. Stock splits are not seen as a sign of a company's future success. The main reasons for stock splits in India are to boost share liquidity, lower the share price to a popular range, and draw in new investors. Most managers prefer their shares to trade below Rs. 400 (around $9).

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