What is a Bonus Share?

A bonus share is an “additional share” issued by a company to its existing eligible shareholders without requiring them to pay an additional amount. The shares are generally issued by capitalising eligible reserves.

For example, 

• In a 1:1 bonus issue, a shareholder holding 100 shares receives 100 additional shares.
• This takes the total holding to 200 shares.

Note: A bonus issue increases the number of shares but does not increase the shareholder’s proportionate ownership in the company. This happens because the company’s total value does not increase just because new bonus shares are issued. After a bonus share issue, the company’s share price is usually adjusted downward in the same proportion. 

What is the ” Bonus Share “Record Date in India?

The bonus share record date in India is the date used to determine which shareholders are eligible to receive the bonus shares. For example, suppose a company announces a 1:1 bonus issue and sets 15 October as the record date.

Now, shareholders who are eligible as per the applicable settlement cycle and the company’s stated eligibility requirements may get the bonus shares allotted. Thus, holding 100 eligible shares would result in 100 additional bonus shares.

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