WIPRO goes ex-bonus in the ratio 1:3 on March 06, 2019.Here’s how it impacts your equity holdings and F&O positions


#1

As per SEBI guidelines for adjustments to F&O contracts in case of announcement of corporate actions (Methodology explained here on NSE website) :

WIPRO has considered and approved Bonus at the ratio of 1:3 i.e 1 bonus share issued at Rs.0 for every 3 shares held.

The Company has fixed Record Date as March 07, 2019, for the purpose of Bonus Shares.

Symbol : WIPRO
Bonus issue ratio : 1:3
Ex-Date : March 06, 2019

Effect on holdings -

When a bonus is issued, the share price drops, in this case by a factor of 1.33 (Adjustment factor for Bonus issue of A:B is defined as (A+B)/B. In the case of WIPRO, the adjustment factor is (1+3)/3 = 1.3333, since the bonus issue ratio is 1:3.

So, if you held WIPRO at an average price of 380 , the price of each share after bonus adjustment will be 285.7

You’ll be given 1 share at Rs.0 for every share 3 shares held at Rs 390, thereby maintaining your overall investment value. Please note that a bonus issue only increases liquidity and not your investment value.

Adjustments for Option Contracts -

  1. Strike Price: The adjusted strike price shall be arrived at by dividing the old strike price by the
    adjustment factor.
  2. 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 3200.

Ex - WIPRO 28-MAR-2019 380 CE lot size 2400 - after adjustment will be WIPRO 28-MAR-2019 285 CE lot size 3200.

Adjustments for Future contracts -

  1. Futures base price: The adjusted futures base price shall be arrived at by dividing the old futures
    price by the adjustment factor.
  2. 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 3200.

Ex - FUTSTK WIPRO 28-MAR-2019 380.15 lot size 2400 - after adjustment will be WIPRO 28-MAR-2019 285.10 lot size 3200

Note - The above changes are effective from March 06, 2019. Refer to the circular from NSE regarding this for more information. To know more about the impact of corporate actions on stock prices, check this chapter on Varsity.


#2

when will I get the adjusted shares credited into my account?


#3

Same question.

Also, would historic charts get updated to reflect the ex bonus price? Or would it continue show a gap down on price from the ex bonus date?


#4

For Bonus shares to be credited to your DEMAT account it generally takes 15 days from the record date, but this depends on the RTA (Registrar & Share Transfer Agents). You will receive an SMS from CDSL when your bonus shares are credited to your DEMAT.


#5

Hey @Nishantr

The charts have been updated.


#6

@Kshiteesh_Saralaya @Shivam_Gupta BONUS shares of Wipro are approved for listing and trading from March 15 means the same has been credited to all .


#7

@Kshiteesh_Saralaya: Still in my Zerodha account Wipro share quantity has not increased. Share price has reduced as per the calculation.


#8

@Karimkhan_Pathan : bonus listed from today means as per t plus ,delivery of shares sold today will be required by broker by 10 am of March 19 . bonus shares will reflect in your demat before this time or else how today’s seller will give delivery .