Shares of Kotak Mahindra Bank appeared to witness a dramatic crash in early trade on Wednesday, plunging by over 80% and touching an intraday low of around Rs 425 on the BSE. At first glance, the sharp fall caused alarm among investors tracking the stock. However, there was no deterioration in the bank’s business performance, asset quality or financial health behind the move.
The apparent crash was purely the result of a technical price adjustment following the bank’s 5:1 stock split, which came into effect on the same day. As the shares began trading on an ex-split basis, the market price automatically adjusted to reflect the increased number of shares now outstanding.
Under the stock split, each equity share with a face value of Rs 5 was subdivided into five equity shares with a face value of Re 1 each. Since the number of shares increased fivefold, the share price adjusted to roughly one-fifth of its previous level. This mathematical adjustment made the stock appear to be down sharply on trading screens, even though there was no real erosion of value.
On platforms that do not automatically adjust historical prices, the stock showed a near-80% fall. In reality, before the split, Kotak Mahindra Bank shares were trading above Rs 2,100. Post the 5:1 split, the adjusted price settled around Rs 420. Once this adjustment is factored in, the stock was down only about 1.5–2% on the day, which is a routine market movement.
On a split-adjusted basis, the stock continues to trade within its recent range. Over the past 52 weeks, the adjusted low is around Rs 346, while the high is close to Rs 460. The bank’s market capitalisation, after accounting for the split, stands at roughly Rs 83,500 crore, and the stock remains up over 9% on a year-on-year basis.
For investors, the stock split does not change the overall value of their holdings. What changes is only the number of shares and the price per share. An investor who held one share before the split now holds five shares, with the price of each share adjusted accordingly. The total investment value remains broadly the same, subject to normal market fluctuations.
No action is required from shareholders, as the additional shares are automatically credited to demat accounts after the record date. Stock splits are typically undertaken to improve liquidity and make shares more accessible to a wider base of retail investors, rather than to signal any change in fundamentals.
This is not the first time the bank has carried out a split. In September 2010, it executed a 2:1 split by reducing the face value from Rs 10 to Rs 5. The latest split, effective January 14, 2026, reduces the face value further from Rs 5 to Re 1 through a 5:1 subdivision, again aimed at enhancing trading participation.
Brokerage commentary remains focused on the lender’s medium- to long-term outlook rather than the stock split. Recent institutional research reports continue to highlight steady growth prospects, improving deposit quality and stable profitability, reiterating positive views on the bank’s business model despite broader sector challenges.
In essence, Kotak Mahindra Bank shares did not actually crash by 80%. The steep fall seen on screens was a technical adjustment due to the stock split and not the result of any adverse development in the bank’s operations or financial strength.
