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

reverse stock splitThe 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 worksMr Ram’s position BEFORE reverse stock split
Original number of shares owned by Ram500 shares
Original share priceRs 200/share
Total original portfolio valueRs 1,00,000 (Rs 1 Lakh)
Mr Ram’s position AFTER reverse stock split
Reverse stock split ratio5-for-1
Shares owned by Ram after reverse split100 shares
New share price after reverse stock splitRs 1,000/share
Total portfolio value after reverse splitRs 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. 
ParameterReverse Stock SplitForward Stock Split
Number of outstanding sharesDecreasesIncreases
Share PriceIncreasesDecreases
SynonymsReverse 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 NameEx-DateRecord Date
Thinkink Picturez Ltd06-02-202007-02-2020
Arnold Holdings Ltd18-03-202019-03-2020

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 NameEx DatePurposeRecord DateND Start DateND End Date
L.G.BALAKRISHNAN & BROS.LTD.15-Mar-10Consolidation of Shares17-Mar-1010-Mar-1016-Mar-10
LS INDUSTRIES LTD.26-May-10Consolidation of Shares09-Jun-1026-May-1014-Jun-10
ALLIED COMPUTERS INTERNATIONAL (ASIA) LTD.29-Jun-10Consolidation of Shares01-Jul-1024-Jun-1029-Jun-10
INNOVATIVE TECH PACK LTD.16-Sep-10Consolidation of Shares17-Sep-1009-Sep-1016-Sep-10
ASAHI INFRASTRUCTURE & PROJECTS LTD.03-Nov-10Consolidation of Shares04-Nov-1028-Oct-1002-Nov-10
STANDARD BATTERIES LTD.09-Nov-10Consolidation of Shares10-Nov-1003-Nov-1009-Nov-10
GUJARAT METALLIC COAL & COKE LTD.-$04-Mar-11Consolidation of Shares07-Mar-1125-Feb-1104-Mar-11
GAYATRI SUGARS LTD.27-Apr-11Consolidation of Shares28-Apr-1120-Apr-1127-Apr-11
BAFFIN ENGINEERING PROJECTS LTD.17-Jun-11Consolidation of Shares20-Jun-1113-Jun-1117-Jun-11
INTER GLOBE FINANCE LTD.05-Jul-11Consolidation of Shares15-Jul-1105-Jul-1120-Jul-11
WINSOME TEXTILE INDUSTRIES LTD.-$15-Jul-11Consolidation of Shares18-Jul-1111-Jul-1115-Jul-11
FIRSTOBJECT TECHNOLOGIES LTD.25-Jul-11Consolidation of Shares26-Jul-1119-Jul-1125-Jul-11
WINSOME YARNS LTD.04-Aug-11Consolidation of Shares05-Aug-1129-Jul-1104-Aug-11
VIJAY TEXTILES LTD.02-Sep-11Consolidation of Shares05-Sep-1125-Aug-1102-Sep-11
SUPERTEX INDUSTRIES LTD.07-Sep-11Consolidation of Shares08-Sep-1130-Aug-1107-Sep-11
SEA GOLD AQUA FARMS LTD.15-Sep-11Consolidation of Shares-15-Sep-1130-Sep-11
Decipher Labs Ltd19-Sep-11Consolidation of Shares01-Oct-1119-Sep-1104-Oct-11
JAUSS POLYMERS LTD.03-Oct-11Consolidation of Shares15-Oct-1103-Oct-1119-Oct-11
Paisalo Digital Ltd04-Oct-11Consolidation of Shares05-Oct-1127-Sep-1104-Oct-11
DYNACONS SYSTEMS & SOLUTIONS LTD.03-Nov-11Consolidation of Shares04-Nov-1128-Oct-1103-Nov-11
Sezal Glass Limited09-Nov-11Consolidation of Shares11-Nov-1102-Nov-1109-Nov-11
ANKA INDIA LTD.13-Jan-12Consolidation of Shares18-Jan-1213-Jan-1223-Jan-12
RUBFILA INTERNATIONAL LTD.16-Jan-12Consolidation of Shares17-Jan-1210-Jan-1216-Jan-12
Radix Industries (India) Limited03-Feb-12Consolidation of Shares17-Feb-1203-Feb-1222-Feb-12
RADHE DEVELOPERS (INDIA) LTD.14-Feb-12Consolidation of Shares16-Feb-1209-Feb-1215-Feb-12
ADITYA SPINNERS LTD.02-Mar-12Consolidation of Shares05-Mar-1228-Feb-1203-Mar-12
Nandan Denim Limited07-Mar-12Consolidation of Shares09-Mar-1201-Mar-1207-Mar-12
MAHAN INDUSTRIES LTD.09-Mar-12Consolidation of Shares12-Mar-1202-Mar-1209-Mar-12
GANGA PAPERS INDIA LTD.12-Mar-12Consolidation of Shares19-Mar-1212-Mar-1221-Mar-12
PASUPATI SPG.& WVG.MILLS LTD.15-Mar-12Consolidation of Shares16-Mar-1209-Mar-1215-Mar-12
ANJANI SYNTHETICS LTD.-$28-Mar-12Consolidation of Shares29-Mar-1221-Mar-1228-Mar-12
FOUNDRY FUEL PRODUCTS LTD.14-Jun-12Consolidation of Shares15-Jun-1211-Jun-1214-Jun-12
RESURGERE MINES & MINERALS INDIA LTD.14-Jun-12Consolidation of Shares15-Jun-1208-Jun-1214-Jun-12
ZYDEN GENTEC LTD.26-Sep-12Consolidation of Shares27-Sep-1220-Sep-1226-Sep-12
NOVA IRON & STEEL LTD.30-Oct-12Consolidation of Shares31-Oct-1222-Oct-1230-Oct-12
Rockon Enterprises Ltd02-Nov-12Consolidation of Shares05-Nov-1229-Oct-1202-Nov-12
NOUVEAU GLOBAL VENTURES LTD.10-Dec-12Consolidation of Shares11-Dec-1204-Dec-1210-Dec-12
GLOBAL CAPITAL MARKETS LTD.10-Jan-13Consolidation of Shares11-Jan-1304-Jan-1310-Jan-13
CRESSANDA SOLUTIONS LTD.18-Feb-13Consolidation of Shares20-Feb-1313-Feb-1319-Feb-13
FOURTH GENERATION INFORMATION SYSTEMS LTD.22-Feb-13Consolidation of Shares25-Feb-1315-Feb-1322-Feb-13
DION GLOBAL SOLUTIONS LTD.28-Feb-13Consolidation of Shares01-Mar-1322-Feb-1328-Feb-13
INDOVATION TECHNOLOGIES LTD.14-Mar-13Consolidation of Shares15-Mar-1308-Mar-1314-Mar-13
Mindvision Capital Ltd26-Mar-13Consolidation of Shares28-Mar-1320-Mar-1325-Mar-13
SYBLY INDUSTRIES LTD.-$04-Apr-13Consolidation of Shares05-Apr-1303-Apr-1304-Apr-13
Adroit Infotech Ltd10-Apr-13Consolidation of Shares12-Apr-1305-Apr-1311-Apr-13
RAMINFO LIMITED10-Apr-13Consolidation of Shares12-Apr-1305-Apr-1311-Apr-13
INDIA INFRASPACE LTD.14-May-13Consolidation of Shares26-May-1314-May-1329-May-13
DUNCANS INDUSTRIES LTD.23-May-13Consolidation of Shares24-May-1320-May-1323-May-13
GOPALA POLYPLAST LTD.23-May-13Consolidation of Shares24-May-1320-May-1323-May-13
Excel Castronics Limited07-Jun-13Consolidation of Shares21-Jun-1307-Jun-1326-Jun-13
Joy Realty Limited12-Jun-13Consolidation of Shares24-Jun-1312-Jun-1326-Jun-13
S&T CORPORATION LTD.13-Jun-13Consolidation of Shares27-Jun-1313-Jun-1302-Jul-13
KUNSTSTOFFE INDUSTRIES LTD.11-Jul-13Consolidation of Shares12-Jul-1305-Jul-1311-Jul-13
VENTURA TEXTILES LTD.29-Jul-13Consolidation of Shares30-Jul-1324-Jul-1329-Jul-13
Matra Kaushal Enterprise Limited02-Aug-13Consolidation of Shares16-Aug-1302-Aug-1321-Aug-13
Neueon Towers Ltd07-Aug-13Consolidation of Shares10-Aug-1302-Aug-1307-Aug-13
NORRIS MEDICINES LTD.22-Aug-13Consolidation of Shares23-Aug-1321-Aug-1322-Aug-13
NEYCER INDIA LTD.26-Aug-13Consolidation of Shares27-Aug-1322-Aug-1326-Aug-13
OMEGA INTERACTIVE TECHNOLOGIES LTD.25-Sep-13Consolidation of Shares-20-Sep-1326-Sep-13
Proaim Enterprises Ltd31-Oct-13Consolidation of Shares01-Nov-1325-Oct-1331-Oct-13
RAVILEELA GRANITES LTD.28-Nov-13Consolidation of Shares06-Dec-1328-Nov-1311-Dec-13
CIL NOVA PETROCHEMICALS LTD.05-Dec-13Consolidation of Shares06-Dec-1329-Nov-1305-Dec-13
NIHAR INFO GLOBAL LTD.22-Apr-14Consolidation of Shares23-Apr-1415-Apr-1422-Apr-14
KRIPTOL INDUSTRIES LTD.23-Apr-14Consolidation of Shares25-Apr-1417-Apr-1423-Apr-14
KKRRAFTON Developers Ltd17-Oct-14Consolidation of Shares20-Oct-1413-Oct-1417-Oct-14
SYSCHEM (INDIA) LTD.12-Dec-14Consolidation of Shares15-Dec-1408-Dec-1412-Dec-14
Negotium International Trade Ltd29-Oct-15Consolidation of Shares31-Oct-1526-Oct-1529-Oct-15
Quasar India Ltd29-Oct-15Consolidation of Shares31-Oct-1526-Oct-1529-Oct-15
Inceptum Enterprises Ltd03-Nov-15Consolidation of Shares04-Nov-1528-Oct-1503-Nov-15
Infronics Systems Ltd05-Nov-15Consolidation of Shares07-Nov-1502-Nov-1505-Nov-15
MAHALAXMI RUBTECH LTD.05-Nov-15Consolidation of Shares06-Nov-1530-Oct-1505-Nov-15
RANDER CORPORATION LTD.26-Nov-15Consolidation of Shares27-Nov-1519-Nov-1526-Nov-15
CCL INTERNATIONAL LTD.04-Dec-15Consolidation of Shares07-Dec-1530-Nov-1504-Dec-15
Mukta Agriculture Ltd14-Jan-16Consolidation of Shares15-Jan-1608-Jan-1614-Jan-16
NETLINK SOLUTIONS (INDIA) LTD.28-Jan-16Consolidation of Shares29-Jan-1621-Jan-1628-Jan-16
Mystic Electronics Ltd08-Feb-16Consolidation of Shares09-Feb-1602-Feb-1608-Feb-16
VEER ENERGY & INFRASTRUCTURE LTD.22-Mar-16Consolidation of Shares23-Mar-1616-Mar-1622-Mar-16
Palred Technologies Limited26-Apr-16Consolidation of Shares27-Apr-1620-Apr-1626-Apr-16
PS IT Infrastructure & Services Limited11-May-16Consolidation of Shares12-May-1605-May-1611-May-16
Safal Securities Ltd13-Oct-16Consolidation of Shares14-Oct-1605-Oct-1613-Oct-16
Veerhealth Care Limited29-Nov-16Consolidation of Shares30-Nov-1623-Nov-1629-Nov-16
Chandni Textiles Engineering Ind. Ltd08-Dec-16Consolidation of Shares09-Dec-1602-Dec-1607-Dec-16
TTI Enterprise Ltd21-Dec-16Consolidation of Shares22-Dec-1615-Dec-1621-Dec-16
SANGUINE MEDIA LTD.19-Jan-17Consolidation of Shares20-Jan-1713-Jan-1719-Jan-17
ALLIED COMPUTERS INTERNATIONAL (ASIA) LTD.17-Feb-17Consolidation of Shares20-Feb-1713-Feb-1716-Feb-17
AADHAAR VENTURES INDIA LTD.02-Mar-17Consolidation of Shares03-Mar-1723-Feb-1702-Mar-17
SVC Resources Limited23-Mar-17Consolidation of Shares24-Mar-1720-Mar-1723-Mar-17
Veronica Production Ltd23-Mar-17Consolidation of Shares24-Mar-1717-Mar-1723-Mar-17
Ontic Finserve Ltd13-Apr-17Consolidation of Shares17-Apr-1707-Apr-1713-Apr-17
AVANCE TECHNOLOGIES LTD.24-Apr-17Consolidation of Shares25-Apr-1718-Apr-1724-Apr-17
Mishtann Foods Ltd05-May-17Consolidation of Shares08-May-1728-Apr-1705-May-17
Xtglobal Infotech Ltd12-May-17Consolidation of Shares15-May-1705-May-1712-May-17
Global Infratech & Finance limited23-Aug-17Consolidation of Shares25-Aug-1718-Aug-1723-Aug-17
BANAS FINANCE LTD.29-Aug-17Consolidation of Shares30-Aug-1722-Aug-1729-Aug-17
EVERLON SYNTHETICS LTD.29-Sep-17Consolidation of Shares03-Oct-1725-Sep-1729-Sep-17
IND Renewable Energy Ltd29-Sep-17Consolidation of Shares03-Oct-1725-Sep-1729-Sep-17
Danube Industries Ltd16-Oct-17Consolidation of Shares17-Oct-1710-Oct-1716-Oct-17
BLUE CIRCLE SERVICES LTD.23-Oct-17Consolidation of Shares24-Oct-1713-Oct-1723-Oct-17
BAMPSL SECURITIES LTD.26-Oct-17Consolidation of Shares27-Oct-1718-Oct-1726-Oct-17
ESAAR (INDIA) LTD.10-Nov-17Consolidation of Shares13-Nov-1706-Nov-1710-Nov-17
JMD Ventures Ltd04-Dec-17Consolidation of Shares05-Dec-1727-Nov-1704-Dec-17
Confidence Finance And Trading Limited27-Dec-17Consolidation of Shares28-Dec-1720-Dec-1727-Dec-17
ATHARV ENTERPRISES LTD.12-Apr-18Consolidation of Shares13-Apr-1806-Apr-1812-Apr-18
SWADESHI INDUSTRIES LEASING CO.LTD.14-Jun-18Consolidation of Shares15-Jun-1808-Jun-1814-Jun-18
Signet Industries Limited13-Aug-18Consolidation of Shares14-Aug-1807-Aug-1813-Aug-18
UNIMODE OVERSEAS LTD.11-Oct-18Consolidation of Shares12-Oct-1805-Oct-1811-Oct-18
Colorchips New Media Ltd22-Oct-18Consolidation of Shares23-Oct-1815-Oct-1822-Oct-18
BRIJLAXMI LEASING & FINANCE LTD.15-Nov-18Consolidation of Shares17-Nov-1812-Nov-1815-Nov-18
MANGAL CREDIT AND FINCORP LTD.26-Nov-18Consolidation of Shares27-Nov-1816-Nov-1826-Nov-18
COMFORT INTECH LTD.-$24-Jan-19Consolidation of Shares25-Jan-1918-Jan-1924-Jan-19
Jamshri Realty Ltd-$21-Feb-19Consolidation of Shares22-Feb-1918-Feb-1921-Feb-19
Sai Baba Investment And Commercial Enterprises Ltd28-Mar-19Consolidation of Shares01-Apr-1925-Mar-1928-Mar-19
DHANLEELA INVESTMENTS & TRADING COMPANY LTD.12-Apr-19Consolidation of Shares15-Apr-1910-Apr-1912-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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