3.33.1.2 Split and Reverse Split

This topic provides information on split and reverse split.

The split corporate action involves the splitting of unit balances of a parent fund into a child fund. It results in an increase in the total outstanding holdings in the fund. However, both the par value and the price per unit decrease, according to the split ratio.

The reverse split corporate action results in a decrease in the total outstanding holdings in the fund. However, both the par value and the price per unit increase, according to the split ratio.

The split or reverse split ratio could result in fractional balances in the new fund, and in the event of the AMC not allowing such fractional balances, the fractions are redeemed and the proceeds paid out to the unit holders.