Stock splits work slightly different compared to bonuses but the impact is overall the same. It also has the effect of increasing the number of shares and proportionately reducing the price. A stock split effectively splits the face value of the stock. So if the face value of a stock is split from Rs.10 to Rs.5, then it doubles the number of shares outstanding and has the same impact as a 1:1 bonus issue. Similarly, if the stock face value is split from Rs.10 to Rs.2, then the number of shares outstanding go up 5 times and has the same impact as a 4:1 bonus issue. Different companies have different approaches to stock splits. For example companies like Reliance Industries have traditionally preferred to maintain their par value at Rs.10 and instead issue bonus shares to shareholders instead. But most other companies are generally comfortable with splitting the par value of the company since in the post-CCI scenario, the par value is anyways more a theoretical value than a practical value. Stock Splits have a limitation in the sense that once you reach a face value of Rs.1, you cannot split further. Bonuses have no such limits.