What does this mean for shareholders?
If a shareholder owns one share of a company worth Rs 100, a 1:1 bonus issue will convert the holding into two shares worth about Rs 50 each. The total value of the holding remains unchanged at Rs 100.
Once the stock begins trading ex-bonus, the price appears to fall sharply, but this simply reflects the adjustment following the corporate action.
Only shareholders who owned the stock on the record date are eligible to receive the bonus shares. Bonus issues consist of free shares distributed by a company from its reserves and are often seen as a sign of strong financial health and growth prospects.
While the issue of bonus shares increases the total number of outstanding shares, it does not change the company’s market capitalisation. However, it can improve liquidity and affordability, allowing more investors to invest in the stock.
Hind Rectifiers in February reported a 30% year-on-year (YoY) rise in consolidated net profit at Rs 13 crore for the October-December quarter of the ongoing financial year 2026. The firm’s revenue from operations meanwhile grew more than 64% YoY to Rs 277 crore during the quarter under review.
The shares of the company have gained around 6% in the past one week, and more than 13% in the past one month. The stock surged more than 68% in the past one year, and around 686% in the past three years.
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