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Market Intelligence › Basic Terminologies
Swap ratio, record date, and credit of new shares
Published by The Retail Trader · AUG 01, 2026 · Market Basics
Company merging with another company or splitting into two shares – in both cases your holding automatically changes. There is no need to do anything, but it is important to understand.
In a merger, a swap ratio is decided – how many shares of the new company will be exchanged for your old shares. Whoever holds shares on the record date gets credited with new shares.
In between, the old stock may be suspended from trading, and it takes some time for the new shares to be credited.
In demerger, a company becomes one or more listed entities:
• You get shares of both the entities, in a fixed ratio.
• The price of the old stock gets adjusted on the ex-demerger date.
• There may be some delay in listing of the new entity.
• Among us, those shares are in your demat and cannot be sold.
The old price history on the chart becomes meaningless after events unless it is adjusted. And the cost of acquisition is shared between both entities — this is important for tax calculations, and is often forgotten.
This article is for educational purposes only. It is not a buy or sell recommendation, a claim of guaranteed returns, or advisory guidance. Exchanges, SEBI and RBI change rules, rates and procedures from time to time, so verify every figure with your broker or an official source.