On Thursday, Reliance Industries Ltd. (RIL) announced that a proposal to issue bonus shares in a 1:1 ratio had been accepted by the board. This was the most valuable firm on Dalal Street’s sixth bonus issuance. The business led by Mukesh Ambani stated that a separate announcement will be made regarding the record date. RIL shares were trading 1.54 percent lower at Rs 2,983.10 after the development.
Only current stockholders are eligible for bonuses. The company’s surplus and free reserves are decreased, but the number of outstanding equity shares rises. Book value per share and earnings per share (EPS) ratios decline as a result of the business activity. It lowers share price proportionately to the quantity of bonus shares issued as a result.
“The issue of bonus shares in the ratio of 1:1, i.e. 1 (one) new fully paid-up equity share of ₹ 10/- (Rupees Ten Only) each for every 1 (one) existing fully paid-up equity share of ₹ 10/- (Rupees Ten Only) each, to the eligible equity holders,” Reliance Industries said in a filing to stock exchanges. The board of directors has stockholders of the business as of the record date, through the capitalization of funds received as securities premium and/or retained earnings and/or general reserve.”
The bonus shares, according to Reliance Industries, will be distributed from the securities premium account that was funded with cash, general reserve funds, or retained earnings as of March 31, 2024.
RIL’s stock has increased 318 percent since its last bonus issue in the calendar year 2017, when it turned ex-date for the 1:1 issuance on September 7, 2017, to an unusual level of Rs 3,015 on Wednesday. A comparable bonus share ratio was disclosed by Reliance Industries for its 2009 offering. The ex-date of the stock was November 26 of that year. In a 1:1 ratio, the 1997 bonus edition was announced. Bonus shares were offered in 1980 in a 3:5 ratio and in 1983 in a 6:10 ratio.
In the meantime, the RIL board requested consent from shareholders to raise the company’s authorized share capital from Rs 15,000 crore to Rs 50,000 crore.
It authorized the forfeiture of RIL equity shares that are partially paid up and on which call money—either the first, second, or final call—is still owed. According to RIL, if the call money is not paid by September 20, 2024, or before, the forfeiture will take place.
