There is big news for BSE shareholders.
The Bombay Stock Exchange (BSE) has approved a 2:1 bonus share issue, according to a company filing.
Under the proposal, eligible shareholders will receive 2 additional shares for every 1 share they already own.
However, the bonus issue is still subject to shareholder approval through a postal ballot.
How Will the BSE Bonus Share Issue Work?
Under the proposed 2:1 bonus issue, shareholders will receive:
2 bonus shares for every 1 fully paid-up BSE share held.
For example, if an investor owns 100 BSE shares on the relevant record date, they could receive 200 additional shares.
This would take their total holding to 300 shares, subject to the final approval and eligibility conditions.
The face value of each share is ₹2.
The company has not yet announced the record date for the bonus issue.
Who Will Be Eligible for the Bonus Shares?
Only shareholders who meet the eligibility requirements on the relevant record date will receive the bonus shares.
The record date will determine which investors are entitled to the additional shares.
The bonus shares will be issued from the company’s available Capital Redemption Reserve and General Reserve, based on the reserves available as of December 31, 2024.
Investors should therefore keep an eye on BSE’s official announcements for the record date and other important details.
This Is BSE’s Second Bonus Issue Since Listing
The latest announcement is notable because this will be the second bonus share issue by BSE since it became a listed company in 2017.
The exchange first became India’s first listed stock exchange in 2017.
The new bonus issue could increase the number of shares in circulation while giving existing shareholders additional shares without requiring them to make another investment.
Why Do Companies Issue Bonus Shares?
Bonus shares are additional shares given to existing shareholders without charging them extra money.
Companies generally issue bonus shares for several reasons.
They can use accumulated free reserves to increase the company’s paid-up share capital and make the stock more accessible to investors.
Although shareholders receive additional shares, a bonus issue by itself does not mean they receive an immediate cash payout.
The overall value of an investor’s holding is generally adjusted because the number of shares increases.
BSE Has Also Paid Dividends
BSE has also rewarded shareholders through dividends in recent years.
According to publicly available information, the exchange announced a ₹12 per-share dividend in May 2023, with an ex-dividend date of August 4, 2023.
In June 2024, BSE announced a ₹15 per-share final dividend, with an ex-dividend date of June 14, 2024.
BSE’s Long History
BSE has a long history in India’s financial markets.
Established in 1875, the exchange was originally known as the Native Share & Stock Brokers’ Association.
It was later known as the Bombay Stock Exchange and is now widely referred to as BSE.
In 2017, BSE became India’s first listed stock exchange.
Over the years, it has played an important role in providing companies with a platform to raise capital and access India’s financial markets.
What BSE Shareholders Should Watch Now
The 2:1 bonus issue has been approved by the BSE board, but shareholders still need to approve it through the postal ballot process.
The record date has not yet been fixed.
Investors should therefore wait for the official announcement regarding shareholder approval, the record date and other conditions before determining their eligibility.
The key takeaway: if the proposal receives the required approvals, eligible BSE shareholders will get 2 bonus shares for every 1 share held on the record date.
