Archive · 30 Nov 2025
Government to Legalize Fractional Shares
The Indian government is planning to make some big changes to help regular people invest in the stock market.
They want to allow something called 'fractional shares,' which are like small pieces of a big, expensive stock.
This way, even people with a little money can invest.
Right now, these fractional shares exist but aren't officially allowed.
The government also wants to make it easier for companies to give their employees shares as a reward.
This is similar to what's already happening in other countries like the US and Japan.
Experts think this will make it easier for more people to invest and help the stock market grow.
The government is considering legalizing fractional shares to boost retail investor participation in equity markets.
The Corporate Laws (Amendments) Bill will seek to amend the Companies Act to enable holding and issuance of fractional shares.
Fractional shares are shares split into smaller units, making high-value stocks accessible to small investors.
The Bill will also introduce enabling provisions for non-monetary employee benefit schemes like RSUs and SARs.
Individual investors currently own nearly a fifth of the market, the highest level in over two decades.
- Who
- The Indian government and retail investors.
- What
- Legalization of fractional shares and streamlining of employee benefits.
- When
- The Corporate Laws (Amendments) Bill will be tabled in the Winter Session of Parliament.
- Where
- India.
- Why
- To boost retail investor participation in equity markets and enhance the use of employee stock options (ESOPs).
- Fractional Shares
- Shares split into smaller units to make high-value stocks accessible to small investors.
- Current Status
- Holding of fractional shares is not expressly permitted under the Companies Act.
- Proposed Changes
- The Corporate Laws (Amendments) Bill will seek to amend the Companies Act to enable holding and issuance of fractional shares.
- Employee Benefits
- The Bill will also introduce enabling provisions for non-monetary employee benefit schemes like RSUs and SARs.
- Retail Investors
- Individual investors own nearly a fifth of the market, the highest level in over two decades.
- Global Precedents
- Jurisdictions like the US, Japan, and Canada already allow holding and trading of fractional shares.