## Stock Splits
### Meaning
A stock split means splitting one share into many — e.g., one share of ₹500 split into 5 shares of ₹100. It is a tool to regulate the market price of shares.
Why split? If a share's price climbs too high, it becomes less tradable. For example, if a company's share rises from ₹50 to ₹1,000 over the years, it may move out of the reach of many small investors. A split lowers the per-share price back into an affordable range.
> Note: A stock split changes the number of shares and face value, but not the total market capitalisation — the company's value and each holder's total stake are unchanged.
### Advantages
1. Makes shares affordable to small investors.
2. A larger number of shares can increase the number of shareholders, raising the investment potential.
### Limitations
1. Additional expenditure is incurred on the split process.
2. A low share price may attract speculators / short-term investors, which companies generally do not prefer.