Corporate Announcements and Share Price Dynamics : A Study in Indian Context

The relationship between share price dynamics and corporate announcements, particularly regarding stock splits and bonus issues, has been a subject of interest among shareholders, analysts, and traders globally. This study delves into the impact of such corporate announcements on share prices, with a specific focus on the Indian stock market. This study aims to analyse how stock splits and bonuses impact a company's share price. The methodology employed in the study involved using the event study approach to evaluate the influence of stock splits and bonus announcements on the market performance of selected companies. The event window encompasses 61 trading days. By adopting this approach, the study was able to examine market reactions and fluctuations surrounding the announcement, capturing both short-term and long-term impacts on stock prices and trading volumes. The study includes 22 large-cap companies that announced bonus issues and stock splits between 2020 and 2023. The AARs, CAARs and t-tests were analysed to ascertain whether there were any significant abnormal returns during the 61-day window period. This study enables future research in this area.