Recently, there has been considerable confusion about the share price of Adani Power Split apparently falling nearly 80%. Many retail investors lost a lot of money and took it to mean the worst – they thought that the performance of the company, or the fundamentals supporting it, had really taken a turn for the worse. In reality, the loss had nothing to do with the foundation of the company; it was purely because of a stock split. This is how it happened, how the stock price appeared to be falling, and what you need to know as an investor.
What Is a Stock Split?
A stock split occurs when a company’s board of directors issues a corporate action in which it divides its existing single share into multiple new shares to boost the number of shares outstanding.
Although the shareholder’s ratio of ownership of the company stays the same during a stock split, it does affect the number of shares owned and the value in the price per share. For example, if you own a share for Rs. 100 that is split into two shares, each new share will be worth Rs. 50 but you will still have a total of Rs. 100.
What Did Adani Power Do?
Adani Power performed its maiden stock split of 1:5. A stock split is when a company increases the number of its outstanding shares, which lowers the trading price. In the case of Adani Power, it performed a stock split of 1:5, meaning shareholders would increase their shares from 1 to 5, and their face value would drop from ₹10 to ₹2.
The record date for the stock split is September 22nd, 2025. Shareholders will own more shares after the split; however, the total ownership and value they hold in the company will remain unchanged.
Why Did the Price Seem to Crash by ~80%?
What caused the price to appear to decrease by about 80%? In the case of a stock split, the price of each share drops by the same ratio as the split splits the value among more shares. In this case, the stock is, effectively, 1/5th of its value because you have 5 times as many shares.
For instance, if the stock was priced at about ₹709, it might open at ₹141 to ₹150, give or take, for a share of the stock at opening price. The price is lower after the split, but you have 5 times the number of shares, so the decrease in value is simply an effect of stock type, not real value diminished. If you had 100 shares before the split, you would have 500 shares after the split. No value lost or gained unless the market reflects movement.
What Happened After the Split Took Effect
Once the split was effective (the “ex-split” date), the stock reacted positively. On that day, Adani Power saw a rally of around 17-20% in trading.
The drop that people noticed (80%) was thus misleading without the context of the split. Many media reports mention the “plunge,” but clarify that it was just price adjustment.
Why Did Adani Power Do the Split? What Are the Implications?
There are several reasons companies do stock splits. Adani Power’s reasons include:
- Making shares more accessible: A lower price per share means smaller retail investors can buy shares more easily. High share price can be a psychological and practical barrier.
- Improving liquidity: When there are more shares outstanding and lower price per share, trading volume tends to increase. That improves ease of entry and exit for investors.
- Wider participation: Retail participation tends to increase after splits, since smaller ticket sizes are involved. It can help broaden the shareholder base.
However, it’s important to note what does not change:
- The company’s market capitalization remains same immediately after the split.
- Business fundamentals (revenue, profit, debt, contracts) are unaffected by the split itself.
Other Factors at Play: Sentiment, Regulatory Clarity, the Hindenburg Episode
This stock split did not occur in isolation. Since 2023, Adani Group had been under heavy scrutiny due to allegations by Hindenburg Research regarding manipulation, related-party transactions, misuse of funds, and accounting practices.
Recently, SEBI (Securities and Exchange Board of India) has dismissed the most serious of those allegations, giving a “clean chit” to the group.
This regulatory clarity has helped restore investor confidence. Combined with the stock split, it acted as a catalyst for a renewed rally in Adani Power shares. Many investors saw this as an opportunity.
What Should Investors Know / What to Watch Out For
If you are an investor or planning to become one, here are some tips to interpret this situation well and make informed decisions.
- When you see a sudden huge percentage drop (like 80%), always check if there was a corporate action (split, bonus issue, merger etc.). Without that context, such drops can be misleading.
- Confirm the record date and ex-date: the date on which the share will trade ex-split or ex-bonus. To benefit, you needed to hold shares before the record date. Adani Power’s record date was September 22, 2025.
- Monitor volume and liquidity, especially after ex-split. Sometimes lower face value shares trade more, but volatility may increase. There could be wild swings initially.
- Keep an eye on fundamentals: earnings, capacity expansion, regulatory environment, debt levels. Splits help with perception and liquidity, but only substantive business performance drives long-term returns.
- Watch overall market sentiment. Adani’s situation had been heavily influenced by external allegations, regulatory scrutiny, global macro environment. Clean regulatory outcomes tend to help shares recover, while fresh negative news can create renewed pressure.
Conclusion
In short, Adani Power’s recent “crash” of ~80% in share price is not a crash in value—it’s just a technical adjustment due to a 1:5 stock split. Investors who held shares before the record date now have five times more shares, each worth roughly one-fifth the previous price. Market value for each investor remains intact (barring ordinary market movements). On top of that, recent favorable regulatory decisions have boosted confidence, resulting in a rally post-split.
For those watching from outside: this is a classic case of how corporate actions can distort initial perceptions. Before reacting emotionally to headline numbers, dig into what’s really happening behind them.