The Padam Cotton Yarns Limited (PADAMCO) board has announced a 1:1 bonus issue, meaning shareholders will receive one additional share for each share they hold. The record date for this bonus issue is January 8, 2025. You can check the announcement from the company here.
Bonus issue details
| Company | Padam Cotton Yarns Limited |
|---|---|
| Bonus Ratio | 1:1 |
| Record Date | January 8, 2025 |
| Ex-Date | January 8, 2025 |
| Eligibility | Shareholders holding or buying shares on or before the cum-date (January 7, 2025) |
| Credit Timeline | Within 2 trading days from the record date (January 8, 2025) |
What is a Bonus Issue?
A bonus issue is a way for a company to reward its shareholders by giving them additional shares at no extra cost. However, the value of your investment remains the same.
When a company issues bonus shares, the number of shares increases, but the investment value remains the same. The stock price is adjusted according to the bonus ratio, this should not be mistaken for a correction or a fall in stock price.
Example: If you held 10 shares of Padam Cotton Yarns Limited (PADAMCO) priced at ₹340 each, and the company announces a 1:1 bonus, you’ll receive 10 more shares. Your total holdings will now be 20, and the share price will adjust to approximately ₹170. However, your overall investment value remains unchanged at ₹3,400.
Who is eligible for the bonus issue?
Shareholders who hold or buy Padam Cotton Yarns Limited (PADAMCO) shares on or before the ex-date (January 7, 2025) will be eligible to receive the bonus shares. To qualify, the shares must be credited to your demat account by the record date (January 8, 2025).
When will the bonus shares reflect in my demat account?
The bonus shares are typically credited to your demat account within 2 trading days from the record date (January 8, 2025). Initially, they may appear under a temporary ISIN on Console and will take an additional 4-5 working days to be assigned a permanent ISIN. Once assigned, the shares will reflect in Kite and be available for trading.
What happens to my holdings and P&L on Kite and Console after the ex-date?
After the ex-date, the share price will be adjusted to reflect the bonus issue, which may temporarily cause a drop in your P&L on Kite and Console.
Once the bonus shares are credited to your demat account, your holdings will be updated with the revised quantity. The buy average price will also be recalculated and updated within a couple of days after the shares are credited.
Also, we adjust the OHLC data and charts on Kite for corporate actions like bonuses, stock splits, and rights issues. We’ve explained it here.
Why has my average price dropped after the bonus issue?
Bonus shares are credited at no cost, and their value is considered zero. When these shares are added to your demat account, the average buy price is recalculated by dividing the original investment cost across the increased number of shares, reducing the average price.
Example: If you held 10 shares at ₹340 each and received 10 bonus shares, your total holdings become 20 shares.
The average price is then recalculated as ₹3,400 (original cost) / 20 shares = ₹170 per share.
Can I sell my shares before the bonus shares are credited?
Yes, you can sell your shares normally if you wish to. This will not affect your trades or your P&L, as the bonus shares are allotted based on your holdings as of the record date, January 3, 2025. Click here to learn more about the effect of bonus issues on your holdings.