Oil India Limited goes ex-bonus in the ratio 1:2 on 27 March 2018 i.e. 1 bonus shares will be issued at Rs.0 for every 2 shares held in the Demat account of all eligible shareholders.
Effect on Holdings:
When a bonus is issued, the share price reduces, in this case by a factor of 1.5. So if you held Oil India shares at an average price of Rs.340, the price of each share on ex-date would become 340/1.5 = Rs.226. The price of each share gets divided by 1.5. Each share held in Demat will become 1 share at Rs.226 and 1 bonus share at Rs.0.
Please note that your investment value does not increase here. Your share price reduces and the remaining investment value is given to you in the form of bonus shares.
P&L of holdings:
Until the bonus shares are credited to your Demat, your IOC holdings in Kite/Q will show an artificial drop in P&L. Once the bonus shares are credited to your Demat, your P&L will be restored to its correct value.
You will receive an SMS from CDSL when your bonus shares are credited to your Demat which could take upto 2 weeks.
Adjustments for Options Contracts:
- Strike Price: The adjusted strike price shall be arrived at by dividing the old strike price by the
adjustment factor. - Market Lot: The adjusted market lot shall be arrived at by multiplying the old market lot by the
adjustment factor. The revised market lot would be 3399.
Adjustments for Futures Contracts:
- Futures base price: The adjusted futures base price shall be arrived at by dividing the old futures
price by the adjustment factor. - Market Lot: The adjusted market lot shall be arrived at by multiplying
Refer the circular for more. To know more about the impact of corporate actions on stock prices, check this chapter on Varsity.