Over 5 cos to allot bonus shares by June-end

India Infoline News Service | Mumbai |

According to market experts, bonus shares are being given to improve liquidity of the stock

Despite volatile markets, around a dozen companies have announced bonus shares in the past one month.

Among the companies include Larsen & Toubro and Sun Pharmaceuticals.

Around five companies would be allotting bonus shares within the next 10 days.

Tata Teleservices (Maharashtra) on Wednesday has proposed to issue bonus shares. Emami also has declared it would issue bonus shares to the shareholders in proportion of one (bonus share) for every two existing shares held.

According to market experts, bonus shares are being given to improve liquidity of the stock.

Bonus shares are issued to the existing shareholders without any consideration.

Bonus
shares are issued based upon the number of shares that the shareholder already owns. While the issue of bonus shares increases the total number of shares issued and owned, it does not increase the value of the company. Only fully paid-up shares are eligible for bonus.

The share price of the company gets adjusted according to the bonus ratio. For instance, if the share price of the company is Rs 300 before the bonus and it issues bonus shares in the 1:1 ratio, the post-bonus price would be Rs 150. The total market value of the company would, however, remain the same.


 

Advertisements

  • Save upto Rs.2.67 lakh with Pradhan Mantri Awas Yojana ...Know more
  • Now Save Rs.3150 on your Demat Account ...Click here
  • Now get IIFL Personal Loan in just 8* hours...APPLY NOW!
  • Get the most detailed result analysis on the web - Real Fast!
  • Actionable & Award-Winning Research on 500 Listed Indian Companies.