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IPO FAQs » Stock Market Basics » Post Comments

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What is bonus share and itís record date?

Bonus shares are free shares issued by the company to its existing share holders. Bonus shares are issued in a ratio of the shares an investor hold. For example when a company offers 1:5 bonus shares, it means a share holder will get 1 free share for 5 shares. So if an investor holds 100 shares at the time of bonus then they will become 120 shares.

Bonus shares are usually announced by the company with a record date, the date which is considered for the bonus shares. All the investors holding the shares on the record date are eligible for bonus shares.

Company usually gives bonus shares as a substitute of dividend payouts.

The face value of the share doesn’t get change after bonus. This is unlike stock split.

Bonus shares increases the number of shares in the market which changes the Earning Per Share EPS (companies net profit / number of shares). As net profit is still remain same and the numbers of shares are higher, shares EPS goes down after the bonus shares are issued.

Ideally it should reduce the share price but it doesn’t happen in the ratio of shares are offered as bonus shares thus it usually in the profit of the share holders. This happens because of increase in liquidity of the share and signal of company’s promise to share its profit with its investors.

Date Last Updated: 2/17/2008 9:00:59 PM

<< Check out more FAQs about Stock Market Basics

User Comments

31.  akshay      Oct 23, 2014 7:56:06 PM IST
i purchase a esaar india on 20oct and record date is 21 soo can i eligible for bonus share 

30.  savita      Dec 16, 2013 11:29:05 AM IST
If record date is 20 december.
I got shares at 10 december .
& some sharee at 18 dec.
may i got divideend on all shares? 

29.  srinivas      Apr 4, 2012 10:00:10 PM IST
What is Meant by record date for Bonus Shares . Will Bonus shares will get credited in our demat account if we hold shares before a day on record date & are we eligible for Bonus shares if sale immediately purchased shares after the record date  

28.  shailesh parekh      Feb 21, 2012 11:40:21 AM IST
what is the record date of oil bonus share ?

when india bull infra & power share listing to be done? 

27.  Himanshu Dhote      Nov 25, 2011 9:23:00 PM IST
Hi,

I am retail investor and holds Amtek India share since last couple of years. I would appreciate if you can answer below queries.

1. It is been 3 days the bonus record date (22nd Nov 2011) has been passed but bonus shares are not credited to my demate account. Any idea, how many days/weeks it is going to take?
2. If I sell existing share, would I still get the bonus share?

Thanks in advance,
Himanshu Dhote
 

26.  s.bhargava      Oct 31, 2011 5:37:41 PM IST
Dear sir i want to know to how calculate the bonus and how much its % according to Indian government ? 

25.  V. SUDEER      Oct 3, 2011 3:57:43 PM IST
DEAR SIR,

I PURCHASED 100 ASHOK LEYLAND SHARES ON 07.03.2011. THE RECORD DATE FOR BEING ELIGIBLE FOR BONUS SHARES IS 03.08.2011. THE BONUS SHARES HAVE NOT BEEN CREDITED TO MY ACCOUNT SO FAR. WHAT IS TO BE DONE.  

24.  sabarinath      Aug 16, 2011 4:15:58 PM IST
Dear sir/madam

I have purchased 2/8/11 35 share of ashok leyland, i will be eligible for 1:1 bonus. when i will get the bonus share?.already iam waiting for 13days so which time approxmately credit my shares plz clarify my request sir or madam 

23.  SUKHWINDER      Aug 5, 2011 12:31:43 PM IST
I HAD BOUGHT 100 ASHOK LEYLAND SHARES IN JULY FOR 52.10 PER SHARE ,BUT TODAY ITS PRICE HAD DROPPED TO 23 PER SHARE AND I HAVE NOT GOT ANY BONUS SHARES,SO ULTIMATELY I HAD LOST RS. 2910 WITHIN 20 DAYS.WHAT SHOULD IT BE CALLED FAIR TRADING OR CHOR BAZAARI. 

22.  Vimalraj R      Aug 4, 2011 11:14:36 AM IST
hi,
I have shares of Ashok leyland, bought 2 months before, but I did not get the bonus shares and the amount of each share got dimished to 25 Rs, The Record date is 3-Aug-2011, But today is 4-Aug-2011, it is not yet credited, kindly give the solution for this. 

21.  Prathamesh      Aug 2, 2011 10:44:59 AM IST
Sir,

I purchased 250 shares of ashok leyland today...will i be eligible for bonus shares?? 

20.  Maitrik      Jul 24, 2011 3:20:44 PM IST
Dear Sir,

I have purchased 300 share of ashok leyland, i will be eligible for 1:1 bonus. 

19.  Dharmesh      Jul 4, 2011 7:57:20 PM IST
Dear sir,

i have 500 share of ashok leyland as dated on 1 Jan 2011
i want to know i m eligible to get bonus & when it will get. 

18.  J R Bangia      Jun 29, 2011 9:17:00 PM IST
When will I get the recent Ttan Bonus shares 

17.  Suhail      Jun 27, 2011 10:47:43 AM IST
Dear sir,

Record date for bonus share issued by TITAN was June 24, 2011.
I purchased TITAN shares on June 24, 2011, whether I'm eligible for getting the bonus share.

Kindly reply to Email

Regards,
Suhail 

16.  Rajveer Singh      Jun 21, 2011 6:08:06 PM IST
I have 500 Shares of Ashok Leyland dated 5th May'11.
Am i eligible for both dividend and bonus shares?? 

15.  prajith      Jun 17, 2011 2:25:15 PM IST
I have 50 share of ashok leyland which on 15/06/2011 issued bonus share . howfar it will benifit me 

14.  MARUTHAPPAN      May 3, 2011 8:59:57 PM IST
how we know the bonus share is issued to us, the company x share already we have?

 

13.  shivaji      Apr 24, 2011 1:05:06 AM IST

Respected Sir / Madam
Is there any site which keeps track of bonus decelared by various companies (i.e.announcement date)which is updated within couple of hours / days........
2. what is the FACE valUE ? 

12.  Vimal      Aug 14, 2010 10:57:51 AM IST
Respected Sir / Madam
Is there any site which keeps track of bonus decelared by various companies (i.e.announcement date)which is updated within couple of hours / days........ 

11.  archana      Mar 19, 2010 11:12:47 PM IST
i have puchased 51 share of STRTECH on 12/03/10. the company anniunced bonus share 1:1. the record date was 17/03 and ex date was 15/03. when i will get the bonus share? 

10.  rk      Mar 18, 2010 12:16:49 PM IST
Will IVRCL share purchased on 17 Mar 10 online be eligible for bonus share with the record date of 19 Mar 10? Is the delay in delivery of online purchase catered for? 

9.  nitin jhunjhunwala      Apr 6, 2009 6:28:11 PM IST
but as per companies act or sebi guidelines a company can not issue bonus shares within 1 year of its listing of its ipo.Plz explain to me in detail 

8.  Vikram Singh      Jun 10, 2008 9:04:00 PM IST
Defination by ICICIDirect:

The registered shareholders of the company are entitled to corporate benefits such as dividend, bonus, rights etc. announced by the company from time to time. Since, the ownership of shares of companies traded on the stock exchange is freely transferable and to enable the company to know the persons entitled to the benefits, all transfers of securities have to be registered with the company (this is required in case of transfer of shares in physical form). Since transfer of securities is a continuous process open any time, the company announces cut off dates from time to time and members on the register of shareholders as of these cut off dates are entitled to the benefits. Such cut-off dates are record dates. Alternatively, the company might choose the close the register of shareholders for registration of transfer during a specified period. All transfer requests received before the commencement of the book closure or on or before the record date are considered for the purpose of transfer. A Company cannot close its books for more than 30 days at stretch for a book closure, and not more 45 days in a year. The period between two Book Closure cannot be less than 90 days.

ACC announced a Book Closure (BC) for the period 6th July to 30th July'96. During this period, the company had closed its register of security holders. This was done to determine the number of registered members who were eligible for the Bonus 3:5 and a dividend of 40%. The process of transfer of shares was operational till 5th July'96. The company announced a No Delivery period from 12th June to 9th July'96 before the Book Closure. During this period, trading was permitted in the securities but the trades were settled only after 9th July. Hence, the buyers of the shares were not be eligible for the Bonus 3:5 and a 40% dividend. The first day of the No Delivery period is considered as an Ex - Date since the buyer of the shares is not eligible for the corporate benefits for this BC.

The same logic holds good for Record date, but the two main differences are that:

In case of a record date, the company does not close its register of security holders. Record date is a cut off date (in the above example '5th july96) for determining the number of registered members who are eligible for the corporate benefits [Interim dividend (30%)].
 

7.  sami yousif      May 27, 2008 1:44:51 PM IST
Company usually gives bonus shares as a substitute of dividend payouts.
Is there any other scientific reasons for the companies to issue bonous shares? what does the company benefit from capitalizing part of its resrve,SHE is still the same?  

6.  SAMIR      Feb 27, 2008 9:31:15 PM IST
CAN ANYONE PLSE TELLL ME WHAT IS RECORD DATE FOR BONUS SHARES AND WHEN IT WILL BE GIVEN TO SHAREHOLDER 

5.  vipingupta      Feb 23, 2008 6:57:58 PM IST
repl will issue bonus 1for1 as no money would not be paid by the co. for fractiion share but the may be lesser face value or afree warrant to be converet on later date. 

4.  shyam sunder guptas      Feb 22, 2008 7:12:41 PM IST
thanks for posting my comments on website. In this connection I want to add one thing about record date that bonuses will be issued only to existing holders rather than original allottee as in company law there is no provision for issuing shares retrospectively 

3.  pawanluthra      Feb 21, 2008 9:59:02 AM IST
i think bonous shares 1;1 cheers and enjoy i am sure investor wil not loss this shares long term 

2.  PM      Feb 19, 2008 7:58:22 PM IST
ISSUE OF BONUS SHARES DOESENT HAVE ANY SENCE BECAUSE THE RATEIS STILL TO HIGH INSPITE OF DOING THIS THEY HAVE TO SPLIT THE SHARE IN 5:1 RATIO 

1.  Gaurav       Feb 18, 2008 1:07:30 PM IST
even if they issue bonus shares. price would automatically get adjusted and there would hardly be any chances of gain. 

 

 

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