Hi,
Script : BALKRISIND
Bonus shares issued on 21-Dec-2017 . 1:1
As per my understanding post bonus share issue, the share price will be reduced to half, and there is no change in price on the below, please clarify with example if possible.
In bonus share, price doesn’t get reduced.its reward from the company. Only price vil get reduced in the case of Share SPLIT…
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So you mean if i have 100 shares of INR 100/- = INR 10,000/-, post bonus share issue will be INR 20,000/- ?
Pls clarify
Yes for extra share you got is free of cost…when you sell @ that time they may tax for capital gain tax…
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It’s like company had rewarded you for holding there share…&
share split happens when company feels there share price is too high to trade in market. So increase the liquid share in market, they split the share. Due to that share price also comes down & trading of shares also increase.
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Can you refer the below content from varsity, it states that the investment value will remain same & the share price will be reduced.
For more information pls refere
http://www.sharemarketschool.com/how-is-a-bonus-issue-different-from-a-stock-split/
no … after the bonus share price will get adjusted accordingly and overall value will remain more or less same …
do some googling about previous instances …
for ex:-1
relaince was trading at 1560 arnd q1 results and it announced bonus shares at 1:1 ratio …
after the bonus date relaince started trading around 800rs …
there is some difference between split and bonus … google it
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Yes, On Bonus, price will be adjusted, but Facevalue of share wont change
in case of split, price will be adjusted and facevalue also wil be adjusted.
Major Advantage of bonus is - dividend will increase as share qty increased…
Hi,
Bonus share is nothing but a another form of Dividend.
Theroticaly yes it value should be corrected,but not equal to ratio of bonus.
"Why value should correct…?"
Ans :- Profit of the company will remain same, but number of share increase as per ratio (in this case number of shares vil get doubled). Due to that PE ratio vil get diluted.
& Share price vil increase or decrease based on PE ratio.
Another point is sudden increase in volume of share makes its price to decrease bit, but not equal to ratio.
That’s why ppl say value correct ,after bonus share. But it’s only theroticaly.
Correction of share price, after bonus share is depend on fundamental of that company.
Aside…:—
Dear Muneez pls confirm the price of share has changed after the bonus share.
theoritcially or pratcially , price correction will be directly proportional to ratio of the bonus …
there will be some price movement on the stoct from the annoucement of the split till the record date …
for ex:-
relaince was trading at 1560 kind just before the announement. before the record date it was trading approximately at 1620/1630 …
after the bonus date it started trading at 810
Refer to the below screen shot, price has been declined a bit after the record date.
As per my understanding, the share will be decreased by almost half after record date & no such changes was found.
BALKRISIND"
Bonus shares issued on 21-Dec-2017 .
1:1
So does it mean that if you buy Or sell before Or after bonus issue assuming that there are no major fluctuations in price apart from the effect of bonus issue, there will be minimum scope of making any profit?
whatever the trend may continue,… and Liquidity may increase.
But Around bonus date, Some Investors will take delivery of these shares for certain tax benefit of that year,
And the movement can be similar before & after Ex dividend dates of other stocks…