Introduction
At first glance, a 90 percent fall in a stock price looks alarming. For investors tracking Angel One, such a sharp drop on trading screens can easily trigger confusion or panic. However, this sudden decline is not a reflection of weakening business fundamentals or market sentiment. Instead, it is linked to a stock split. Understanding how and why this happens is important, especially for retail investors, because stock splits can distort price charts and portfolio values if viewed without context. This article explains the Angel One stock split in simple terms and clarifies why the apparent fall is more optical than real.
Context and Background
A stock split is a corporate action where a company increases the number of its outstanding shares by reducing the face value of each share. The total market value of the company remains unchanged. In India, stock splits are often used to improve liquidity and make shares more affordable for a wider set of investors.
Angel One is a well-known retail broking firm that has benefited from rising participation in equity markets, digital trading platforms, and financialisation of savings. Over time, its share price moved into a higher range, which can sometimes reduce trading volumes among small investors. A stock split helps address this by lowering the price per share without altering the company’s underlying worth.
What Exactly Is Happening in the Angel One Stock Split
The reason Angel One may show a nearly 90 percent fall on charts is due to the split ratio. For example, if a stock with a face value of ₹10 is split into shares with a face value of ₹1, the number of shares increases tenfold, while the price per share adjusts proportionately downward.
So, if Angel One was trading around ₹3,000 before the split, post-split prices may appear closer to ₹300. On charts or trading apps, this adjustment can look like a steep fall even though shareholders are holding more shares with the same total value.
Importantly, nothing changes in terms of ownership or economic value. An investor who owned one share earlier may now own ten shares, each priced lower, but the combined value remains the same, barring normal market movements.
Why Trading Apps Show a Sharp Drop
Most trading platforms adjust historical price charts after a stock split. This adjustment ensures continuity in long term price trends, but it can also create confusion. The chart may show a sudden drop on the effective date of the split, which looks dramatic but is purely mathematical.
Portfolio values also adjust accordingly. While the per-share price drops sharply, the total invested value remains unchanged at the time of the split. Any gains or losses after that point are based on normal market trading, not the split itself.
Impact on Investors
For existing investors, the Angel One stock split does not result in a loss of wealth. The number of shares held increases, improving flexibility. Smaller share prices make it easier to buy or sell in parts rather than in large ticket sizes.
For new investors, the split can improve accessibility. A lower share price often attracts higher retail participation, which can improve liquidity and trading volumes over time. However, investors should remember that affordability does not mean a cheap valuation. The company’s earnings, growth outlook, and competitive position still matter.
From a taxation standpoint, stock splits do not trigger capital gains. The purchase price is simply adjusted based on the new number of shares when calculating future tax liabilities.
Opportunities and Risks to Consider
One opportunity from a stock split is improved market participation. Higher liquidity can reduce bid-ask spreads and make price discovery more efficient. For a broking firm like Angel One, which benefits from active retail participation, this can align well with its business ecosystem.
However, there are risks as well. Short-term volatility is common around stock split dates due to confusion, speculative trading, or misinterpretation of price changes. Some investors may mistakenly believe the stock has crashed and sell in panic, while others may buy without understanding valuation metrics.
Another risk lies in over-focusing on the split itself. A stock split does not change revenue, profits, or cash flows. If business performance weakens in the future, the split will not protect investors from downside risk.
Conclusion
The apparent 90 percent fall in Angel One’s share price following the stock split is a visual adjustment, not a value erosion. Stock splits are neutral corporate actions aimed at improving liquidity and accessibility, especially for retail investors. For Angel One, the move reflects confidence in its scale and market presence rather than any concern about fundamentals.
Investors should use this moment to deepen their understanding of how stock splits work and focus on long term business performance instead of short term price optics. As participation in Indian equity markets continues to grow, such corporate actions are likely to become more common, making financial literacy more important than ever.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
Parvati Rai is the Vice President of the Research team at Equentis. She has over 15 years of equity-research and strategy-consulting experience. A specialist in deep-dive valuations, financial modelling, and forecasting, she has built research desks from the ground up, by steering buy-side, sell-side, and independent coverage across sectors. When she isn’t fine-tuning models, Parvati unwinds on nature treks and mentors aspiring analysts.
