Fundamentals & valuation
What is Bonus issue?
Also called: Bonus shares
Hinglish mein padhein: Bonus issue kya hota hai?
A bonus issue gives existing shareholders free extra shares in a fixed ratio, such as 1:1, funded from the company's reserves.
Your number of shares goes up and the price adjusts down proportionally, so the value of your holding doesn't change on the ex-date.
Bonuses can signal management confidence and improve liquidity by lowering the per-share price.
Related terms
- Stock splitA stock split divides each share into several smaller shares — for example a 1:5 split turns one ₹10 face-value share into five ₹2 shares.
- Ex-date and record dateThe record date decides who gets a dividend, bonus or split. With T+1 settlement, the ex-date is the same day as the record date.