Upcoming bonus shares: bonus issues, record dates and ex-dates

A bonus issue gives a company's shareholders new shares for free, in proportion to the shares they already hold. The company pays for them out of its reserves, the profits it has kept over the years, by turning part of them into share capital. No money changes hands, and each shareholder owns the same part of the company as before.

The first number is the new shares given for the second number of shares held. A 1:1 bonus gives one new share for every share held, so 100 shares become 200; 2:1 gives two for every one, so 100 become 300; 1:2 gives one for every two, so 100 become 150. This page writes the ratio in words: 1 for 1, 2 for 1, 1 for 2.

The record date is the day the company reads its register of shareholders: whoever holds the shares at the end of that day takes part in the bonus issue. Shares bought on the exchange are settled the trading day after the trade, so the ex-date, the first day a buyer no longer takes part, falls on the record date itself. To take part, buy the shares no later than the trading day before the ex-date.

For a bonus issue announced from 1 October 2024, the company allots the new shares the working day after the record date, and they can be traded from the second working day after it. They are credited to the demat account that held the shares on the record date.

No. The company is worth the same spread over more shares, so the price falls in proportion on the ex-date: after a 1:1 bonus a share that closed at ₹1,000 opens near ₹500, and 100 shares become 200 worth about the same. Price charts and returns on this site adjust every earlier price for each bonus issue, so the fall on the ex-date is not read as a loss.

Both give shareholders more shares at a lower price, with the holding worth the same. A bonus issue turns reserves into share capital and keeps each share's face value; a split divides each share into several of a smaller face value and leaves the share capital as it was. A 1:1 bonus and a split from ₹10 to ₹5 both double the shares held.

A company must complete a bonus issue within 15 days of its board's approval, or within two months of the board meeting where its shareholders must also approve the issue. Once announced, a bonus issue cannot be withdrawn.