Reverse Stock Splits in India – Definition, Examples & List of Reverse Stock Split Companies.

reverse stock split

The term reverse stock splits is fairly unpopular among retail investors in India and over the past decade, only 114 companies have announced reverse stock splits. 

While unpopular, it is still important for you, as an investor, to have basic knowledge on reverse stock splits to decide whether they are beneficial or harmful to your portfolio. 

What is a Reverse Stock Split? – Reverse Stock Split Definition

The definition of reverse stock split as per wikipedia is, “Reverse stock split or a reverse split is a process by which shares of companies are merged to form a smaller number of proportionally more valuable shares”. 

What Does Reverse Stock Split mean? – Reverse Stock Split Meaning

Reverse stock split or simply reverse split is the opposite of a forward stock split. In reverse stock split, the number of shares held by shareholders reduces but the overall value of the shares remains the same. 

Reverse Stock Split Example – Reverse Stock Split Explained 

Assume Mr Ram, owns 500 shares of ABC Ltd and the share price is Rs 200 per share. The total value of Mr Ram’s shares is Rs 1,00,000. 

Now, ABC Ltd announces a reverse stock split of 5 for 1. This means that your every 5 shares will be combined to form 1 share. Let us see how reverse stock split works

Mr Ram’s position BEFORE reverse stock split

Original number of shares owned by Ram 500 shares
Original share price Rs 200/share
Total original portfolio value Rs 1,00,000 (Rs 1 Lakh)

Mr Ram’s position AFTER reverse stock split

Reverse stock split ratio 5-for-1
Shares owned by Ram after reverse split 100 shares
New share price after reverse stock split Rs 1,000/share
Total portfolio value after reverse split Rs 1,00,000 (Rs 1 Lakh)

Effect of Reverse stock split on Shareholder Ram’s Portfolio. 

  • The number of shares reduced from 500 shares to 100 shares. 
  • Share Price increased from Rs 200 per share to Rs 1,000 per share.  A 5-time increase. 
  • The value of the portfolio remained the same, Rs 1 Lakh, after and before the reverse stock split. 

In conclusion, there is no positive or negative monetary effect of reverse stock split on an investor’s portfolio. 

Reverse Stock Split Vs Forward Stock Split 

Let us now understand the key differences between reverse stock split and forward stock split. 

Parameter Reverse Stock Split Forward Stock Split
Number of outstanding shares Decreases Increases
Share Price Increases Decreases
Liquidity Reduces Increases
Synonyms Reverse split, stock consolidation, stock merger, share rollback.   Stock split, 
Objective  To attract investors with a high stock price and avoid being delisted or become a penny stock.  To make the share affordable for small investors. 
When is it done? When the market feels the stock is undervalued. When the market feels the stock is overvalued. 

When is Reverse Stock Split Bad for Investors?

A reverse stock split is an artificial method of inflating the share prices. By doing this, the overall market sentiment towards the stock becomes negative. 

  • No concrete growth plan: Investors perceive reverse stock splits as negative because they feel that the  management will artificially increase the share price only because it has no concrete plans for the company’s future and is not confident of the share price increasing naturally. 
  • Consistently falling stock prices: Another reason for reverse stock split being bad for investors is when the share price has been consistently falling reflecting poor earnings and lack of investor confidence in the company.  
  • Manipulate innocent investors: Reverse stock splits are often a ploy to attract naive investors who see a huge rise in share price as an indicator of the company’s quick growth without understanding the real reason for rise in share price. 

When is Reverse Stock Split Good for Investors

Reverse stock split can be While reverse stock splits are often perceived as negative, they can be good for investors if done to: 

  • Attract Big Investors: Often, even though a company is fundamentally strong, it can be classified as a penny stock due to low share price. Also, big investors do not invest in penny stocks. To avoid being considered as a penny stock and damage its reputation among big investors, companies opt for reverse stock split and artificially increase the share prices. This helps them attract big institutional investors and avoid being termed as ‘penny stocks’.

[Suggested Reading: Best Penny Stocks to Buy now in India]

  • Avoid Delisting: Many stock exchanges have strict listing regulations regarding minimum share price and number of shares. Whenever a company’s share price reaches near these delisting limits, companies announce reverse stock splits to avoid the public humiliation and effect on investor sentiment. 

List of Reverse Stock Split in India in 2020

Company Name Ex-Date Record Date
Thinkink Picturez Ltd 06-02-2020 07-02-2020
Arnold Holdings Ltd 18-03-2020 19-03-2020

List of Reverse Stock Split in India in 2021

As of now there are no upcoming reverse stock splits in India for 2021. 

List of Reverse Stock Splits in India between 2010 – 2019  

Company Name Ex Date Purpose Record Date ND Start Date ND End Date
L.G.BALAKRISHNAN & BROS.LTD. 15-Mar-10 Consolidation of Shares 17-Mar-10 10-Mar-10 16-Mar-10
LS INDUSTRIES LTD. 26-May-10 Consolidation of Shares 09-Jun-10 26-May-10 14-Jun-10
ALLIED COMPUTERS INTERNATIONAL (ASIA) LTD. 29-Jun-10 Consolidation of Shares 01-Jul-10 24-Jun-10 29-Jun-10
INNOVATIVE TECH PACK LTD. 16-Sep-10 Consolidation of Shares 17-Sep-10 09-Sep-10 16-Sep-10
ASAHI INFRASTRUCTURE & PROJECTS LTD. 03-Nov-10 Consolidation of Shares 04-Nov-10 28-Oct-10 02-Nov-10
STANDARD BATTERIES LTD. 09-Nov-10 Consolidation of Shares 10-Nov-10 03-Nov-10 09-Nov-10
GUJARAT METALLIC COAL & COKE LTD.-$ 04-Mar-11 Consolidation of Shares 07-Mar-11 25-Feb-11 04-Mar-11
GAYATRI SUGARS LTD. 27-Apr-11 Consolidation of Shares 28-Apr-11 20-Apr-11 27-Apr-11
BAFFIN ENGINEERING PROJECTS LTD. 17-Jun-11 Consolidation of Shares 20-Jun-11 13-Jun-11 17-Jun-11
INTER GLOBE FINANCE LTD. 05-Jul-11 Consolidation of Shares 15-Jul-11 05-Jul-11 20-Jul-11
WINSOME TEXTILE INDUSTRIES LTD.-$ 15-Jul-11 Consolidation of Shares 18-Jul-11 11-Jul-11 15-Jul-11
FIRSTOBJECT TECHNOLOGIES LTD. 25-Jul-11 Consolidation of Shares 26-Jul-11 19-Jul-11 25-Jul-11
WINSOME YARNS LTD. 04-Aug-11 Consolidation of Shares 05-Aug-11 29-Jul-11 04-Aug-11
VIJAY TEXTILES LTD. 02-Sep-11 Consolidation of Shares 05-Sep-11 25-Aug-11 02-Sep-11
SUPERTEX INDUSTRIES LTD. 07-Sep-11 Consolidation of Shares 08-Sep-11 30-Aug-11 07-Sep-11
SEA GOLD AQUA FARMS LTD. 15-Sep-11 Consolidation of Shares 15-Sep-11 30-Sep-11
Decipher Labs Ltd 19-Sep-11 Consolidation of Shares 01-Oct-11 19-Sep-11 04-Oct-11
JAUSS POLYMERS LTD. 03-Oct-11 Consolidation of Shares 15-Oct-11 03-Oct-11 19-Oct-11
Paisalo Digital Ltd 04-Oct-11 Consolidation of Shares 05-Oct-11 27-Sep-11 04-Oct-11
DYNACONS SYSTEMS & SOLUTIONS LTD. 03-Nov-11 Consolidation of Shares 04-Nov-11 28-Oct-11 03-Nov-11
Sezal Glass Limited 09-Nov-11 Consolidation of Shares 11-Nov-11 02-Nov-11 09-Nov-11
ANKA INDIA LTD. 13-Jan-12 Consolidation of Shares 18-Jan-12 13-Jan-12 23-Jan-12
RUBFILA INTERNATIONAL LTD. 16-Jan-12 Consolidation of Shares 17-Jan-12 10-Jan-12 16-Jan-12
Radix Industries (India) Limited 03-Feb-12 Consolidation of Shares 17-Feb-12 03-Feb-12 22-Feb-12
RADHE DEVELOPERS (INDIA) LTD. 14-Feb-12 Consolidation of Shares 16-Feb-12 09-Feb-12 15-Feb-12
ADITYA SPINNERS LTD. 02-Mar-12 Consolidation of Shares 05-Mar-12 28-Feb-12 03-Mar-12
Nandan Denim Limited 07-Mar-12 Consolidation of Shares 09-Mar-12 01-Mar-12 07-Mar-12
MAHAN INDUSTRIES LTD. 09-Mar-12 Consolidation of Shares 12-Mar-12 02-Mar-12 09-Mar-12
GANGA PAPERS INDIA LTD. 12-Mar-12 Consolidation of Shares 19-Mar-12 12-Mar-12 21-Mar-12
PASUPATI SPG.& WVG.MILLS LTD. 15-Mar-12 Consolidation of Shares 16-Mar-12 09-Mar-12 15-Mar-12
ANJANI SYNTHETICS LTD.-$ 28-Mar-12 Consolidation of Shares 29-Mar-12 21-Mar-12 28-Mar-12
FOUNDRY FUEL PRODUCTS LTD. 14-Jun-12 Consolidation of Shares 15-Jun-12 11-Jun-12 14-Jun-12
RESURGERE MINES & MINERALS INDIA LTD. 14-Jun-12 Consolidation of Shares 15-Jun-12 08-Jun-12 14-Jun-12
ZYDEN GENTEC LTD. 26-Sep-12 Consolidation of Shares 27-Sep-12 20-Sep-12 26-Sep-12
NOVA IRON & STEEL LTD. 30-Oct-12 Consolidation of Shares 31-Oct-12 22-Oct-12 30-Oct-12
Rockon Enterprises Ltd 02-Nov-12 Consolidation of Shares 05-Nov-12 29-Oct-12 02-Nov-12
NOUVEAU GLOBAL VENTURES LTD. 10-Dec-12 Consolidation of Shares 11-Dec-12 04-Dec-12 10-Dec-12
GLOBAL CAPITAL MARKETS LTD. 10-Jan-13 Consolidation of Shares 11-Jan-13 04-Jan-13 10-Jan-13
CRESSANDA SOLUTIONS LTD. 18-Feb-13 Consolidation of Shares 20-Feb-13 13-Feb-13 19-Feb-13
FOURTH GENERATION INFORMATION SYSTEMS LTD. 22-Feb-13 Consolidation of Shares 25-Feb-13 15-Feb-13 22-Feb-13
DION GLOBAL SOLUTIONS LTD. 28-Feb-13 Consolidation of Shares 01-Mar-13 22-Feb-13 28-Feb-13
INDOVATION TECHNOLOGIES LTD. 14-Mar-13 Consolidation of Shares 15-Mar-13 08-Mar-13 14-Mar-13
Mindvision Capital Ltd 26-Mar-13 Consolidation of Shares 28-Mar-13 20-Mar-13 25-Mar-13
SYBLY INDUSTRIES LTD.-$ 04-Apr-13 Consolidation of Shares 05-Apr-13 03-Apr-13 04-Apr-13
Adroit Infotech Ltd 10-Apr-13 Consolidation of Shares 12-Apr-13 05-Apr-13 11-Apr-13
RAMINFO LIMITED 10-Apr-13 Consolidation of Shares 12-Apr-13 05-Apr-13 11-Apr-13
INDIA INFRASPACE LTD. 14-May-13 Consolidation of Shares 26-May-13 14-May-13 29-May-13
DUNCANS INDUSTRIES LTD. 23-May-13 Consolidation of Shares 24-May-13 20-May-13 23-May-13
GOPALA POLYPLAST LTD. 23-May-13 Consolidation of Shares 24-May-13 20-May-13 23-May-13
Excel Castronics Limited 07-Jun-13 Consolidation of Shares 21-Jun-13 07-Jun-13 26-Jun-13
Joy Realty Limited 12-Jun-13 Consolidation of Shares 24-Jun-13 12-Jun-13 26-Jun-13
S&T CORPORATION LTD. 13-Jun-13 Consolidation of Shares 27-Jun-13 13-Jun-13 02-Jul-13
KUNSTSTOFFE INDUSTRIES LTD. 11-Jul-13 Consolidation of Shares 12-Jul-13 05-Jul-13 11-Jul-13
VENTURA TEXTILES LTD. 29-Jul-13 Consolidation of Shares 30-Jul-13 24-Jul-13 29-Jul-13
Matra Kaushal Enterprise Limited 02-Aug-13 Consolidation of Shares 16-Aug-13 02-Aug-13 21-Aug-13
Neueon Towers Ltd 07-Aug-13 Consolidation of Shares 10-Aug-13 02-Aug-13 07-Aug-13
NORRIS MEDICINES LTD. 22-Aug-13 Consolidation of Shares 23-Aug-13 21-Aug-13 22-Aug-13
NEYCER INDIA LTD. 26-Aug-13 Consolidation of Shares 27-Aug-13 22-Aug-13 26-Aug-13
OMEGA INTERACTIVE TECHNOLOGIES LTD. 25-Sep-13 Consolidation of Shares 20-Sep-13 26-Sep-13
Proaim Enterprises Ltd 31-Oct-13 Consolidation of Shares 01-Nov-13 25-Oct-13 31-Oct-13
RAVILEELA GRANITES LTD. 28-Nov-13 Consolidation of Shares 06-Dec-13 28-Nov-13 11-Dec-13
CIL NOVA PETROCHEMICALS LTD. 05-Dec-13 Consolidation of Shares 06-Dec-13 29-Nov-13 05-Dec-13
NIHAR INFO GLOBAL LTD. 22-Apr-14 Consolidation of Shares 23-Apr-14 15-Apr-14 22-Apr-14
KRIPTOL INDUSTRIES LTD. 23-Apr-14 Consolidation of Shares 25-Apr-14 17-Apr-14 23-Apr-14
KKRRAFTON Developers Ltd 17-Oct-14 Consolidation of Shares 20-Oct-14 13-Oct-14 17-Oct-14
SYSCHEM (INDIA) LTD. 12-Dec-14 Consolidation of Shares 15-Dec-14 08-Dec-14 12-Dec-14
Negotium International Trade Ltd 29-Oct-15 Consolidation of Shares 31-Oct-15 26-Oct-15 29-Oct-15
Quasar India Ltd 29-Oct-15 Consolidation of Shares 31-Oct-15 26-Oct-15 29-Oct-15
Inceptum Enterprises Ltd 03-Nov-15 Consolidation of Shares 04-Nov-15 28-Oct-15 03-Nov-15
Infronics Systems Ltd 05-Nov-15 Consolidation of Shares 07-Nov-15 02-Nov-15 05-Nov-15
MAHALAXMI RUBTECH LTD. 05-Nov-15 Consolidation of Shares 06-Nov-15 30-Oct-15 05-Nov-15
RANDER CORPORATION LTD. 26-Nov-15 Consolidation of Shares 27-Nov-15 19-Nov-15 26-Nov-15
CCL INTERNATIONAL LTD. 04-Dec-15 Consolidation of Shares 07-Dec-15 30-Nov-15 04-Dec-15
Mukta Agriculture Ltd 14-Jan-16 Consolidation of Shares 15-Jan-16 08-Jan-16 14-Jan-16
NETLINK SOLUTIONS (INDIA) LTD. 28-Jan-16 Consolidation of Shares 29-Jan-16 21-Jan-16 28-Jan-16
Mystic Electronics Ltd 08-Feb-16 Consolidation of Shares 09-Feb-16 02-Feb-16 08-Feb-16
VEER ENERGY & INFRASTRUCTURE LTD. 22-Mar-16 Consolidation of Shares 23-Mar-16 16-Mar-16 22-Mar-16
Palred Technologies Limited 26-Apr-16 Consolidation of Shares 27-Apr-16 20-Apr-16 26-Apr-16
PS IT Infrastructure & Services Limited 11-May-16 Consolidation of Shares 12-May-16 05-May-16 11-May-16
Safal Securities Ltd 13-Oct-16 Consolidation of Shares 14-Oct-16 05-Oct-16 13-Oct-16
Veerhealth Care Limited 29-Nov-16 Consolidation of Shares 30-Nov-16 23-Nov-16 29-Nov-16
Chandni Textiles Engineering Ind. Ltd 08-Dec-16 Consolidation of Shares 09-Dec-16 02-Dec-16 07-Dec-16
TTI Enterprise Ltd 21-Dec-16 Consolidation of Shares 22-Dec-16 15-Dec-16 21-Dec-16
SANGUINE MEDIA LTD. 19-Jan-17 Consolidation of Shares 20-Jan-17 13-Jan-17 19-Jan-17
ALLIED COMPUTERS INTERNATIONAL (ASIA) LTD. 17-Feb-17 Consolidation of Shares 20-Feb-17 13-Feb-17 16-Feb-17
AADHAAR VENTURES INDIA LTD. 02-Mar-17 Consolidation of Shares 03-Mar-17 23-Feb-17 02-Mar-17
SVC Resources Limited 23-Mar-17 Consolidation of Shares 24-Mar-17 20-Mar-17 23-Mar-17
Veronica Production Ltd 23-Mar-17 Consolidation of Shares 24-Mar-17 17-Mar-17 23-Mar-17
Ontic Finserve Ltd 13-Apr-17 Consolidation of Shares 17-Apr-17 07-Apr-17 13-Apr-17
AVANCE TECHNOLOGIES LTD. 24-Apr-17 Consolidation of Shares 25-Apr-17 18-Apr-17 24-Apr-17
Mishtann Foods Ltd 05-May-17 Consolidation of Shares 08-May-17 28-Apr-17 05-May-17
Xtglobal Infotech Ltd 12-May-17 Consolidation of Shares 15-May-17 05-May-17 12-May-17
Global Infratech & Finance limited 23-Aug-17 Consolidation of Shares 25-Aug-17 18-Aug-17 23-Aug-17
BANAS FINANCE LTD. 29-Aug-17 Consolidation of Shares 30-Aug-17 22-Aug-17 29-Aug-17
EVERLON SYNTHETICS LTD. 29-Sep-17 Consolidation of Shares 03-Oct-17 25-Sep-17 29-Sep-17
IND Renewable Energy Ltd 29-Sep-17 Consolidation of Shares 03-Oct-17 25-Sep-17 29-Sep-17
Danube Industries Ltd 16-Oct-17 Consolidation of Shares 17-Oct-17 10-Oct-17 16-Oct-17
BLUE CIRCLE SERVICES LTD. 23-Oct-17 Consolidation of Shares 24-Oct-17 13-Oct-17 23-Oct-17
BAMPSL SECURITIES LTD. 26-Oct-17 Consolidation of Shares 27-Oct-17 18-Oct-17 26-Oct-17
ESAAR (INDIA) LTD. 10-Nov-17 Consolidation of Shares 13-Nov-17 06-Nov-17 10-Nov-17
JMD Ventures Ltd 04-Dec-17 Consolidation of Shares 05-Dec-17 27-Nov-17 04-Dec-17
Confidence Finance And Trading Limited 27-Dec-17 Consolidation of Shares 28-Dec-17 20-Dec-17 27-Dec-17
ATHARV ENTERPRISES LTD. 12-Apr-18 Consolidation of Shares 13-Apr-18 06-Apr-18 12-Apr-18
SWADESHI INDUSTRIES LEASING CO.LTD. 14-Jun-18 Consolidation of Shares 15-Jun-18 08-Jun-18 14-Jun-18
Signet Industries Limited 13-Aug-18 Consolidation of Shares 14-Aug-18 07-Aug-18 13-Aug-18
UNIMODE OVERSEAS LTD. 11-Oct-18 Consolidation of Shares 12-Oct-18 05-Oct-18 11-Oct-18
Colorchips New Media Ltd 22-Oct-18 Consolidation of Shares 23-Oct-18 15-Oct-18 22-Oct-18
BRIJLAXMI LEASING & FINANCE LTD. 15-Nov-18 Consolidation of Shares 17-Nov-18 12-Nov-18 15-Nov-18
MANGAL CREDIT AND FINCORP LTD. 26-Nov-18 Consolidation of Shares 27-Nov-18 16-Nov-18 26-Nov-18
COMFORT INTECH LTD.-$ 24-Jan-19 Consolidation of Shares 25-Jan-19 18-Jan-19 24-Jan-19
Jamshri Realty Ltd-$ 21-Feb-19 Consolidation of Shares 22-Feb-19 18-Feb-19 21-Feb-19
Sai Baba Investment And Commercial Enterprises Ltd 28-Mar-19 Consolidation of Shares 01-Apr-19 25-Mar-19 28-Mar-19
DHANLEELA INVESTMENTS & TRADING COMPANY LTD. 12-Apr-19 Consolidation of Shares 15-Apr-19 10-Apr-19 12-Apr-19

Final Thoughts: 

Reverse stock split or forward stock split are decided by the management. You, as an investor, do not have the option to accept or decline a reverse stock split. But as long as you are invested in fundamentally strong companies, you shouldn’t worry about reverse stock splits as it is merely an accounting tactic. There is no monetary loss or profit in reverse stock splits. 

As an investor, your goal should be to invest in fundamentally strong companies. Luckily this goal is shared by StockBasket as well. StockBasket runs more than 2 million parameters to expertly handpick the best stocks for investment in India and creates baskets as per your financial goals. To know more, open a FREE StockBasket account today and start investing in the best stocks in India for infinite wealth creation. 

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