WHAT IS A BONUS SHARE ISSUE ? | ஊக்கப் பங்கு வெளியீடு என்றால் என்ன?

 

WHAT IS A BONUS SHARE ISSUE? :

In our previous post, we have seen about the dividend, which is sharing the profit with the shareholders.

Now in this post, we will discuss the Bonus shares issue. Let me tell you a quick example, 

You are conducting a party to celebrate the Onsite opportunity you got from the company. You have ordered a 10 Kg cake, expecting that it can serve up to 20 people, but unexpectedly 10 more people have joined your party. Now you got an idea, you have decided to reduce the piece size of the cake so that it can able to serve 30 people present at the party.

Now, the main point here is that the money you have given for the cake you bought doesn't change, but the number of pieces has been increased. Likewise, in the bonus share issue, the money invested in the stock doesn't change but the number of shares you have bought increases.

Thus, The bonus share issue is a type of corporate action where the company issues additional shares to the shareholders instead of cash being credited to your account. All the bonus shares that you are getting here are given to you for free.

Example Scenario:

Let us consider the company Wipro Ltd, announcing a bonus issue of 2:1.

Now let us consider you have 20 shares at ₹500.

The number of shares you have = 20.

The Average share price = ₹500.

Total Amount invested = ₹10,000.

Bonus issue announced = 2:1.

It means that you will receive 2 shares for 1 share. (i.e. you will receive 2 * 20 = 40 bonus shares) as per our example. 

Thus after the issue of Bonus,

The number of shares you have = 20 + 40 bonus shares = 60 shares.

The Average share price = ₹166.67.

Total Amount invested = ₹10,000.

Therefore, the issuance of bonus shares results in a stock price correction proportional to the bonus shares that are issued. 

ADVANTAGE OF BONUS SHARE ISSUE:

1. From the company's point of view, Bonus share issues are done mostly to increase the shareholder's participation. 
2. At times we cannot invest in some fundamentally strong company because the share price would be higher to buy. Bonus shares will help during that time.
3. Issuing Bonus shares will dilute the share price and more retail investors may be able to purchase the shares.
4. After the bonus issue, the dividend per share offered by the company remains the same.
5. You will gain more dividends as the number of shares owned by you is increases.

Thus we have seen the bonus share issue in detail, see you all in the next post.

DISCLAIMER:-

The content of this site is only for educational purpose. I am not SEBI Registered. The motive of this site is to share my knowledge on share market to new budding investors and others who are learning about stock market

My Kind request to my site viewers, Before taking any decision please do self analysis, consult or discuss with Your financial Advisor .

மறுப்பு:-

இந்த தளத்தின் உள்ளடக்கம் கல்வி நோக்கத்திற்காக மட்டுமே. நான் செபியில் பதிவு செய்யப்படவில்லை. இந்த தளத்தின் நோக்கம், பங்குச் சந்தையைப் பற்றிய எனது அறிவை புதிய வளரும் முதலீட்டாளர்கள் மற்றும் பங்குச் சந்தையைப் பற்றி அறிந்துகொள்ளும் மற்றவர்களுக்குப் பகிர்வதாகும்

எனது தள பார்வையாளர்களுக்கு எனது அன்பான வேண்டுகோள், எந்தவொரு முடிவையும் எடுப்பதற்கு முன், சுய பகுப்பாய்வு செய்யுங்கள், ஆலோசனை செய்யுங்கள் அல்லது உங்கள் நிதி ஆலோசகருடன் விவாதிக்கவும்.