Jubilant Foodworks today announced bonus issue of shares in 1:1 form. Does it mean that if i’ll get another 40 shares if im holding 40 shares at the time of announcement? Please guide me on this as this is the first time im getting such bonus shares and have no clue about it. Thanks!
Yes, that correct. Check this circular.
If you are beginner, then you should check this chapter on Varsity.
I read the PDF file but needed more clarification on the bonus share thing
Thanks for the response buddy! Does that also mean that my investment of X amount will also double?
Nope it doesn’t .Quoting the same below from Varsity chapter for reference.
When the bonus shares are issued, the number of shares the shareholder holds will increase but the overall value of investment will remain the same.
Alright got it sudheer_kumar. Thanks!
Subject to the shareholders’ approval, Bonus Shares will be credited to the demat account of the shareholders or share certificates in respect thereof will be dispatched to shareholders on or before July 7, 2018. There will be a record date in due course so you can buy 2 days before record date to get bonus.
Nope. Announcement by the company does not result for eligibility.
To be eligible you need to have shares with you latest by Ex-Date -1.
Eg - If the Ex-date for the bonus is 09-May-2018 then you need to have shares latest by 08-May-2018 end of day in your demat to be eligible.
So the price of the share will gets halved , is that correct? After issuing of bonus.
So, there is no benefit to the investors as the value of investment remains same.
So, why company issues bonus?
To increase the overall number of shares .In other words more shares equals more liquidity.
Hey,
I’ve 10 shares of jubliee food purchased on 9th may,2018
They announced bonus in the ratio of 1:100:
Can anyone make me understand how bonus share allotment will work.
What is the record date? Or till when I’ve to hold these shares
Thanks
The filing in DHRP says it will take 2 months to credit the shares in demat account. Is it true?
Subject to the shareholders’ approval a record date will be fixed and Bonus Shares will be credited to the demat account of the shareholders or share certificates in respect thereof will be dispatched to shareholders on or before July 7, 2018.
There will be a record date in due course so you can buy 2 days before record date to get bonus so it is not anything like that you have to hold the share for getting bonus.you can buy 2 days before record date and get bonus.
Thanks buddy
As the price of share will get half cos of bonus. what type of adjustment will be done to Calls and put ?
for example cmp of 2800 ce is 40 and 2700 pe is 37. what will be the new price tomorrow?
Bonus shares for increasing number of shares and decreasing price so that retail investors can buy it when stock goes on expensive zone.
Main Advantage is looks to me dividend will get increased as no of share increases.
Some people say tax benefit to show case capital paper loss. But my personal experience it does not have any benefit. At then end it will be same.
Some time act as trap for long term investor when they sell both original and bonus share same year. Long term loss not able to set off and short term gain tax has to pay as cost of acquisition will be 0 for bonus shares.