Strota Research

Bonus shares and stock splits: the price jump came before the ex-date, then faded for months

By Strota Newsroom · 2026-11-02 · How Strota reports

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We checked 233 bonus issues and splits on Nifty 500 stocks since 2016. The shares ran ahead of the market into the ex-date and then lagged it, giving back roughly what they had gained.

Shares heading into a bonus issue or a stock split have tended to outrun the market in the weeks before the ex-date, and then hand that lead back. Had you put ₹1 lakh into one of these stocks 20 sessions before the ex-date and sold the day before, the median result was ₹2,437 ahead of the index. Had you bought at the ex-date close instead and held for 60 sessions, the median result was ₹1,544 behind it.

That matters because bonus issues and splits are watched closely by retail investors, and plenty of people buy into them as if the extra shares were free money, even though a bonus or split only changes how many shares you hold, not what the holding is worth. The ex-date is the day the stock starts trading on the new share count, so it is the natural point to measure from.

What happened to share prices before the ex-date

We looked at the 20 trading sessions leading up to each ex-date and compared every stock's move with the Nifty 500 over the same days. The typical stock beat the index by a median 2.44%, and 64.8% of them came out ahead. A median is the middle result, so half the cases did better than that and half did worse.

To check this was not just the way these particular stocks always behave, we measured the same stocks at ordinary times, taking a window starting at every 20th session over the same years. In those ordinary windows they slightly trailed the index, by a median 0.15%, and 49.0% of them beat it, which is close to a coin toss. On the ex-date itself the stocks added a further median 0.71% over the index.

Do bonus and split stocks keep rising afterwards?

In the 20 sessions after the ex-date the stocks fell behind instead: they trailed the index by a median 2.96%, and only 34.3% of them beat it. At ordinary times the same stocks beat the index 49.2% of the time over a similar window.

The shortfall did not close quickly. After 60 sessions, roughly three months of trading, the stocks were behind the index by a median 1.54%, against a small gain of 0.16% for the same stocks at ordinary times. On ₹1 lakh bought at the ex-date close, the shortfall was a median ₹1,544 after 60 sessions and ₹1,572 after 120 sessions. The 120-session figure is the weakest part of the result, because the gap against ordinary times there falls just short of the usual bar for being confident it is not chance.

Stock splits showed the pattern more than bonus issues

Splits moved further in both directions. Split stocks ran up a median 3.99% before the ex-date and fell behind the index by a median 4.69% over the 60 sessions after. Bonus issues showed a milder version, a median 2.24% before and 0.97% behind over the same 60 sessions. There were only 83 splits in the sample, though, so the split figures rest on fewer cases than the overall result.

The data covers every bonus issue and split with an ex-date from January 2016 to October 2026 on stocks in today's Nifty 500, taken from NSE's corporate actions. That came to 233 events, 150 bonus issues and 83 splits, across 155 companies. Prices were adjusted for each bonus or split, so a share that halved in price because of a split was not counted as a loss.

Using today's index list means companies that later dropped out are missing, and those are often the ones that did badly. We also could not measure the reaction to the announcement itself, because our history does not include the dates boards approved each bonus or split. Some of the run-up may come from whatever good news led the company to announce one in the first place, and we cannot date that news.

What the record shows is a pattern of excitement that peaks around the ex-date and then wears off. Stocks tended to gain on the market into the bonus or split, and over the following months they gave back roughly what they had gained. For a family holding such a stock, the extra shares that land in the demat account change the count, while the value of the holding stays where the market puts it.

Frequently asked questions

Do stock splits increase the share price?

In our data, split stocks beat the market by a median 3.99% before the ex-date and then trailed it by a median 4.69% over the 60 sessions after. A split changes the number of shares you own, not what your holding is worth.

What happens to a share after a bonus issue?

Across bonus issues since 2016, shares ran a median 2.24% ahead of the market before the ex-date and were a median 0.97% behind it over the 60 sessions after. That is a milder version of the pattern seen in splits.

What is the ex-date for a bonus or split?

It is the day the stock starts trading on the new share count, so anyone buying from that day does not get the extra shares. The share price adjusts on that day to reflect the larger number of shares.

Sources and method

This note is based on Strota's own backtest research. Historical results are not forecasts or investment advice; see the editorial standards for methodology and limitations.