A corporate action is a change a company makes to its shares. The common ones affect how a price chart looks, so it helps to understand them.
Splits and bonuses
- A stock split divides each share into more shares at a proportionally lower price. A 1:2 split turns one ₹1,000 share into two ₹500 shares — the same total value.
- A bonus issue gives existing holders extra shares for free, which similarly lowers the per-share price.
In both cases your total value is unchanged on the action date; only the share count and per-share price change.
Dividends
A dividend is a cash payout to shareholders. On the ex-dividend date the price typically drops by roughly the dividend amount.
Why "adjusted" prices exist
If a chart showed the raw price across a split, you’d see a huge artificial gap that never reflected a real loss. Adjusted prices rescale the history so the series is continuous — past prices are adjusted as if today’s share structure always applied. This is what lets indicators like moving averages and % change be computed correctly across a corporate action.
That’s why a well-built chart "anchors" so the latest bar equals the current price while the history stays continuous and comparable.