Anand Rathi Wealth announced that its Bonus Allotment Committee has set March 5 as the record date for a bonus issue of shares in the 1:1 ratio. A 1:1 bonus issue means that eligible shareholders of a company will get one additional share for every share held by them at no extra cost. This can double their total number of shares while maintaining the overall value of their investment.
"Pursuant to Regulation 42 of SEBI (LODR) Regulations, 2015, we hereby inform you that the Bonus Allotment Committee has fixed the "Record Date" as Wednesday, 05th March 2025 (T-Day) for the purpose of ascertaining the eligibility of shareholders entitled to the allotment of Bonus Equity Shares," the company said in an exchange filing.
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Anand Rathi Wealth added that the shares will be allotted to eligible investors on Thursday, March, 6. On March 6 as many as 4,15,10,317 fully paid-up bonus equity shares of Rs 5 each will be allotted to eligible shareholders.
This means the company will give out one new fully paid-up equity share with a face value of Rs 5, for every existing fully paid-up equity share of Rs 5 held by the eligible shareholders as of the record date.
Why Do Companies Issue Bonus Shares
A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders. For example, a company may give one bonus share for every five shares held. Companies issue bonus shares to attract further investment and reward shareholders for their loyalty.
The issuance of bonus shares is not taxable; however, shareholders must pay capital gains tax if they sell the shares for a net gain.
A company allocates bonus issues according to each shareholder’s stake. Bonus shares do not dilute shareholders’ equity because they are issued in a constant ratio that keeps the relative equity of each shareholder the same as before the issue.
Advantages of Bonus Issues For Investors
Increased holdings: Investors receive more shares without additional cost, possibly increasing future gains if the stock price increases.
Example:
Priya owns 200 shares of a company, each priced at Rs 20. Suppose the company announces a 1:2 bonus issue, meaning one extra share is given for every two shares held. As a result, Priya’s total shares increased to 300. Despite the higher number of shares, the total investment value remains the same.
Initial investment value before the bonus issue:
200 × 20 = Rs 4,000
Investment value after the bonus issue:
300 × (4000 ÷ 300) = Rs 4,000
To be eligible for the bonus shares, investors must hold the shares before the ex-date.
Bonus shares are generally issued in fixed ratios like 1:1, 1:2, or 3:2.
Shareholder loyalty: Rewarding shareholders with bonus shares helps to grow investor confidence and loyalty.
On February 18, Anand Rathi Wealth also announced that it has received approval for its bonus issue from its shareholders, in addition to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Earlier this year on January 13, the company announced the board's decision to issue bonus shares in 1:1 ratio. Notably, this is the first-ever bonus share announcement by the company.
Stock Price Trend
According to the data available on BSE, Anand Rathi Wealth shares have climbed up by 9 per cent in the last year while they have given a return of 7 per cent in the past six months. Defying the recent slump in the stock market, the financial services company has risen 2 per cent year-to-date (YTD) and 5 per cent in one month.
In a longer time frame, Anand Rathi Wealth shares have climbed by around 411 per cent in two years and 612 per cent in three years. On Friday, the stock closed at Rs 4005.15, up by 3.74 per cent on the BSE.
