Updated on March 14, 2023
A Push-out refers to the practice of forwarding new share certificates against old certificates to shareholders after a stock split has been announced by a company. The shareholders do not have to deposit or surrender old share certificates to get the new ones.
A stock split occurs as a result of a decision by the company’s board of directors to increase the number of outstanding shares by issuing more shares to existing shareholders. The stocks are ‘split’ as per the ratio decided and new shares are issued to existing shareholders in the same proportion.The value of shares remains the same after the split. The use of electronic trading and online Demat accounts has made this practice redundant and split shares are credited into client demat accounts electronically.