When the company issues Bonus shares 1:3 (eClerx). That is you get 1 bonus stock per every 3 stocks you own. I have 10 stocks. here the ratio 1:3 will be 3.33 bonus shares for 10. Now I will get 3 shares, but what happens to 0.33 bonus shares or the amount equivalent?
You are wrong, it means for every one stock u hold , u will get 3,not for 3 stocks u will get 1
A bonus ratio of 1:3 indicates that you will receive 1 share for every 3 shares held. If you’re holding 10 shares, you’re eligible to receive 3.33 units. Since fractional units cannot be transferred, you get paid cash for it. The issuing company accumulates all such fractional units, sells it in the open markets and credits funds to your account from such sale.
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The thing is same thing happened with Mothersumi in July, I had 63, but only got 31 (1:2) for the 62, but for the 1 remaining stock I didn’t get anything until now. When I called my brokerage, they are asking me to contact the company directly. Similar issue with Shashun to Strides merger too. for every 16 stocks you get 5 Strides but here too I didn’t get anything for the fractions. What is the time frame for these companies to pay you cash for the fractions?
Hi,
I have one share of Varun Beverages. The company announced 1:2 bonus issue , that means 1 bonus share for 2 shares hold. As I hold only one share then how my qty and price will change after ex date ? For example consider the price before ex date is rupees 1000.
You will get 2 shares. You will have one share after Ex date . And after some days the other one share will be credited.
And after EX date, share price will be 500 rs.
Bonus Issue
In the bonus issue, the stock price will get adjusted according to the bonus number of shares issued. Say a company announced a bonus issue, like in our earlier example, in a 4:1 ratio.
Bonus ratio: 4:1
Stock price before the bonus issue: Rs 100.
Total share count before bonus issue: 100 shares
After bonus issue
Share count: 400 shares
Stock price after bonus issue: (100*100)/400= Rs 25
In bonus issue, the stock price falls in the same proportion as the bonus issue. Had the bonus issue been in a 1:1 ratio, the stock price would have halved to Rs 50
You didn’t answer my question
You will get money credited to your account for 1 share . I.e 1000
In this case how the avg_cost_price will be adjusted what is the formula ? and you said amount will be paid to the user for the fraction of shares, in this case whether the total_invested amount will be adjust or what. Can u pls share how avg_cost_price and total_investment adjusted after Bonus or split.
Only the amount equal to the fractional unit will be transferred. So, in this example, you will receive 3 shares and 0.33 units worth amount will be credited to your primary bank account.
You can refer to the below mentioned Varsity chapter for this. 