Bonus Shares in August 2023

August 2023 brings exciting news for investors as several companies announce bonus share distributions. If you are a stock market enthusiast or an investor, understanding the potential impact of bonus shares on the company’s stock value and investor portfolio is crucial. Let’s understand the bonus shares and see the list of companies that have announced bonus stocks in August 2023.

Bonus shares are free stocks issued by companies as a reward program for their investors. When companies announce bonus shares, it is usually for two reasons: either the company is low on cash and doesn’t have enough cash to pay dividends, or it wants to repurpose its profit. Bonus shares are issued at a fixed ratio depending on the existing holdings of the shareholder. For instance, if a company announces bonus shares at a 2:1 ratio, it implies that shareholders will get 2 bonus shares for each share of the company an investor holds. 

Bonus Shares in August 2023

Kamdhenu Ventures Ltd.

Kamdhenu Ventures Ltd. is an India-based company engaged in manufacturing decorative paints. It offers a wide range of products, including exterior and interior emulsions, acrylic distempers, water-based and solvent primers, etc. The company has fixed August 1, 2023, as the record date for its bonus shares. On the date, eligible investors will receive 1 bonus share for each fully paid share of Kamdhenu Ventures Ltd. 

Financial highlights of the company

• Debt-to-Equity: 0.71
• Profit for FY23: – ₹2.49 crore

NINtec SYSTEMS Ltd.

The company is involved in software development and solutions for global clients. It caters to diverse industry verticals, including automotive, print and media, banking, financial institutions, insurance, transportation, and others. 

The company’s board has announced issuing bonus shares in the ratio of 4:5. The bonus will be credited directly to the Demat accounts of investors who will be holding the company’s shares on the record date.

Financial highlights of the company

P/E ratio: 125

5-year CAGR: 128%

Debt-to-Equity: 0.00

Profit for FY23: ₹5.55 crore  

Raghav Productivity Enhancers Ltd.

The company is engaged in the business of manufacturing, supplying, and exporting silica mass to be used in melting furnaces for steel. The company has announced bonus shares that will be paid to investors.

Financial highlights of the company

P/E ratio: 48.1

5-year CAGR: 52.6%

Debt-to-Equity: 0.00

Profit for FY23: ₹61.2 crore

Lancor Holdings Ltd.

Lancor Holdings is a real estate company engaged in the business of developing and leasing residential and commercial properties and allied activities. The company has announced bonus shares in a 1:2 ratio. The record date for the bonus share distribution is fixed at August 18, 2023.

Financial highlights of the company

P/E ratio: 48.1

5-year CAGR: 16.1%

Debt-to-Equity: 0.84

Profit for FY23: -₹0.41 crore

Advantages of Bonus Shares 

• Bonus shares signify the financial strength of the company. It helps enhance the confidence of investors and attract new investors to the company.

• Bonus shares help improve liquidity by increasing the supply of available stocks. Improved stock liquidity eases buying and selling and increases volume.

• Bonus shares increase the total holdings of shareholders by increasing the number of shares in their portfolio. Although the availability of more shares lowers the price per share, investors can offload the extra shares to realise a profit.
• Bonus shares ensure there is no cash outflow, allowing companies to retain and repurpose their profits.  

Disadvantages of Bonus Shares

• On the flip side, frequent bonus shares may raise a red flag about the company’s financial health. It may mean the company is cash-strapped.

• Bonus shares can also create the illusion that the company is doing well, which might result in an overvaluation of the share price. Investors may consider bonus shares a sign of superior performance, while they may be using them to offset accumulated losses.
• More shares in circulation might reduce the dividend paid per share and dissuade dividend-seeking investors. 

Final Words 

If you have any of the shares mentioned in the article in your portfolio, then bonus shares are coming your way. But if you are a new investor, now is the right time to start your investment journey. Open a Demat account and invest in companies that announced bonus shares in August 2023.  

Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.