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The Regular Bonus Giving Stocks – Best stocks that have issued bonus shares

The regular bonus giving stocks - Best stocks that have issued bonus shares - Overview | Eligibility | Record Date

In this article, we’ll first understand Bonus Shares or Free Shares and then discuss the list of the regular bonus-giving stocks in India. We are confident that the learnings from this article will be very valuable for you. Keep Reading!

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What are Bonus Shares or Free Shares?

A bonus issue, otherwise known as a free share issue, is a term used to describe a free share issue.
The free share that is given to existing shareholders of a company is known as a bonus issue. This is an additional share given to shareholders at no additional cost.
For example, if a company declares a 1:1 bonus issue, then every shareholder gets one share free for every share owned. Thus, a shareholder with 10 shares of a business will get 10 bonus shares, bringing their total to 20 shares.

Also Read What is Bonus Share? | Record & Ex-Bonus Date | Bonus vs Rights

The bonus issue results in an increase in shares, which means that the dividend per share falls. This has no direct impact on the company’s capital or value.
This does not affect the shareholder’s investment, unlike in the case of Rights Issues. Since the shareholder holds more shares than income per share, there is no impact on the value of the investment. The bonus share issue is designed to equalize excess assets with liabilities using the Nominal Share Capital.

Also Read What is the Difference between Record Date and Ex-Dividend Date? | Do Share Prices Drop after Dividend in India?

Eligibility & Date

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All the current shareholders of the company, at the time of the bonus issue, are eligible to receive bonus shares. Once the company announces a bonus issue, it also announces the date when the issue will take place. This is known as the Record Date.
All investors that are shareholders in the company on the record date will receive bonus shares.
Between the issuance announcement date and the record date, these bonus actions are known as cum – bonus. Once the bonus shares have been issued on the record date, they are known as ex-bonus.

Also Read What is a Rights Issue of Shares? | Rights and Bonus Issue | Example | Eligibility | Types

The Regular Bonus Giving Stocks

Investors who want stable income look for stocks of companies that regularly offer free shares.
The overall investor community favours regular free share issues as the share price often appreciates after the free share issue. Here’s a little checklist for you to keep in mind:

  • They can add to your portfolio if you hold the stocks for the long term.
  • You get more dividends if the company pays going forward.
  • They increase market demand and then the share price while increasing liquidity.
  • They reduce the entry barrier for small investors because of the reduction in the stock price after a premium issue.

However, over the long term, the stock price depends mainly on the fundamentals and growth prospects of the company. Therefore, investors should decide after analyzing the company’s fundamentals and not just the bonus basis.
Some Indian companies which have a regular track record of issuing bonus shares are:

Also Read How to Apply for Rights Issue Online? – Bank or Demat a/c or RTA Website

Nifty50 stocksTotal Number of Bonus Announcements (Last 10 Years)
Infosys3
Wipro3
BPCL3
ITC2
GAIL2
IOC2
HCL Tech2
L&T2
ONGC2
Britannia2
List of the regular bonus-giving stocks in India

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