Listed companies undertake corporate actions depending on the requirements. These are steps taken steps generally result in changes to the number of stocks and/or their price.
A few such actions include going for a bonus issue, announcing a stock split, and paying dividends.
In this article, we will look at what these corporate actions mean and the companies going for the corporate actions.
Note: the list was last updated on June 17, 2022. Source considered: BSE. The market capitalization data has been taken from AMFI’s list on categorization of small-cap, mid-cap, and large-cap stocks for the period July – December 2021. Stocks with a market capitalization of over Rs 1,000 crore have been mentioned in this list.
Here are the companies that will issue bonus shares, buy back shares or go for a stock split or right issue this week:
Ajanta Pharma has announced a 1:2 bonus issue.
The ex-date for the issue is 22 Jun 2022.
The record date is 23 Jun 2022.
Market Capitalization of the company: Rs 18,926.26 cr
Check out more about the company here: Ajanta Pharma
Nazara Technologies has announced a 1:1 bonus issue.
The ex-date for the issue is 24 Jun 2022.
The record date is 27 Jun 2022.
Market capitalization of the company: Rs 6,576.40
Check out more about the company here: Nazara Technologies
Under a bonus issue, a company issues free shares to its shareholders.
For example, if a company decides to go for a 2:1 bonus issue, it will allot 2 additional shares (for free) for every 1 share held by a shareholder.
However, the share price per share is reduced in similar proportions and the total value of investment remains the same.
Think of it this way: You earlier had 1 share at a total value of Rs 60 and now you have 3 shares (in case of a 2:1 issue) each priced at Rs 20, giving a total value of Rs 60.
As you can see from the above example, a company usually issues bonus shares so as to reduce the price of the shares and encourage retail participation.
When a company undertakes a stock split, that’s what literally happens!
Your stocks are split!
Suppose you held 1 share of Rs 100 and a company announces a 1:5 stock split, you would now own 5 shares.
But, the value of each share will now be Rs. 20. Hence, the total value remains the same – Rs 100. Like in the case of bonus issues, this move is also taken to encourage retail participation.
The prime difference between a bonus issue and a stock split is that in a bonus issue, the company issues new shares in the market whereas in-stock split, the existing shares are split.
Note: This article is only for educational and informational purposes. Investors are advised to invest in stocks after thorough research and based on their investment goals.
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