Billionaire Mukesh Ambani’s Reliance Industries Limited (RIL) has confirmed plans for a significant bonus share issue. The announcement was made during the company’s 47th Annual General Meeting on September 5, 2024. The bonus shares will be issued in a 1:1 ratio, meaning shareholders will receive one additional share for every share they own. As of now, the exact record date for this bonus issue is yet to be finalized, but it is expected to be announced soon, likely in October 2024.
Main Points
A bonus share issue allows existing shareholders to receive additional shares without any extra cost. For instance, if you hold 1,000 shares, you will now have 2,000 shares after the bonus issue. This move is generally aimed at increasing liquidity in the stock market and making shares more accessible to retail investors.
Record Date and Eligibility
To be eligible for the bonus shares, investors must own RIL shares before the record date. Given that India follows a T+1 settlement cycle, investors should purchase shares at least one day before the record date to qualify for the bonus. If you buy shares on the record date itself, you will not receive the bonus shares.
Since the announcement of the bonus issue, RIL’s share price has experienced fluctuations. The stock opened at ₹2,980 on September 23, 2024, but has since shown a slight decline of about 0.17%. As of October 11, 2024, RIL shares closed at approximately ₹2,929.85.
Recently, the Securities and Exchange Board of India (Sebi) introduced a rule requiring companies to credit bonus shares to investors’ demat accounts within 48 hours of the record date. This rule came into effect on October 1, 2024. It remains to be seen whether this new regulation applies to RIL’s upcoming bonus issue.
Historical Context
Reliance Industries has a history of issuing bonus shares. Previous issues occurred in 1980, 1983, 1997, 2009, and 2017. Each time, these actions were well-received by investors and contributed positively to market sentiment.
Issuing bonus shares can serve multiple purposes:
- Increased Liquidity: More shares in circulation can lead to increased trading activity.
- Attract Retail Investors: Lowering the per-share price can make it more appealing for retail investors.
- Signal Financial Health: A bonus issue often indicates that a company is performing well financially.
Future Expectations
Analysts predict that this bonus share issue could further enhance RIL’s reputation among investors. The company has consistently demonstrated its commitment to rewarding shareholders through various corporate actions.
Key Takeaways for Investors
- Ensure you purchase RIL shares before the record date to qualify for the bonus.
- Keep an eye on market trends following the announcement of the record date.
- Consider how this corporate action fits into your overall investment strategy.
Reliance Industries’ upcoming bonus share issue represents an exciting opportunity for shareholders. With a strong track record and a commitment to enhancing shareholder value, RIL continues to be a significant player in India’s stock market.
