normal profits for its investors if a split or bonus attracts large participants people start looking for small moves and at every fall there is a stop loss and every rise generates profit booking said basanth maheshwari smallcase manager and cofounder basant maheshwari wealth advisers llp bthere is also something called reverse splitin case of a reverse split the number of shares outstanding is reduces thereby increasing the individual value of each share this is more prevalent in the us the reason primarily being to avoid delisting and being branded a penny stock the last reverse stock split was of greenpro capital corp grnq on 28th july 2022 where each holder of 10 shares of grnq got merged to 1 sharethere have not been many incidences of reverse stock split in india last we had seen in 2020 in arnold holdings ltd and thinkink picturez ltd reverse stock split may be good for large investors but not for retail investors explained chaitali dattadont mistake a bonus share for a stock splitbonus share is the issue of share by the company free of cost to existing shareholders the benefits of issuing bonus shares are twofold firstly it gives the existing shareholders a chance to widen their equity holding in a company secondly instances when the share prices of a company become too high for a retail investor to purchase the increase in number of shares reduces the price per share without any alterations in the overall capital holding said sameer jain managing partner psl advocates solicitorsfor example if a retail investor x holds 200 shares of a company and a company declares 51 bonus then in such a case x for every one share he holds gets 5 shares for free that is total 1000 shares for free and his total holding will increase to 1200 sharesrecently bajaj finserv annouced 11 bonus issue which means that for every one share held by the investor they will get an additional share unlike a stock split the company is actually issuing new shares to exisiting investors however again there is no change in ownership and the share price would automatically adjust in the same way ie it would halve in the case of a 11 bonus issuebonus is different from stock split because it is one of the ways for a company to reward its investors by offering more shares of the company it is beneficial for the shareholders of a company as they get additional shares without paying any consideration practically grant of bonus shares is like payment of dividend to the shareholders in kind said hemang parekh partner dsk legalbonus issue also referred to as equity dividend is an alternative to cash dividend bonus shares are free shares that a company offers to its shareholders and investors to add value to its portfolio it is regarded as good tool for the company to make its shareholders happy since issuing bonus shares is an indication that the company is distributing profits