Bonus Shares in January 2024

Imagine receiving additional shares in your favourite company without paying anything. That’s what a bonus share is – a company distributes extra shares to existing shareholders in proportion to their existing holdings.

The company’s objective behind these bonus shares can be varied. Sometimes, it’s a reward for loyal shareholders, showcasing the company’s prosperity and encouraging further investment. It can also be a way to increase the number of outstanding shares, making the stock more liquid and potentially attracting new investors. Ultimately, bonus shares offer existing shareholders a boost in their ownership stake and potentially higher future returns. In this article, check the companies offering bonus shares in January 2024.

List of Bonus Issues in January 2024

Newgen Software Technologies Ltd

Newgen Software Technologies is a software company that is involved in software product development, such as designing and providing end-to-end software solutions.

Key metrics:

• Market Capitalisation: ₹10,544.59 crore
• Stock Price 5Y CAGR: 38.54%

Allcargo Logistics Ltd

Allcargo Logistics offers integrated logistics solutions and specialised logistics services across multimodal transport operations, inland container depots, contract logistics operations, container freight station operations and project and engineering solutions.
Key metrics:

• Market Capitalisation: ₹7,959.31 crore
• Stock Price 5Y CAGR: 31.99%

Note: The data is as of December 27, 2023. 

Benefits of Bonus Shares

A bonus issue can be a beneficial strategy for both the company and its investors. 

For Investors:

• Increased Ownership: Shareholders receive additional shares for free, effectively boosting their ownership stake in the company. This translates to a larger slice of future dividends and capital appreciation.
• Enhanced Liquidity: With more shares in circulation, the stock becomes more liquid, meaning easier buying and selling. This attracts new investors, potentially driving up the share price.
• Psychological Boost: Receiving bonus shares can be seen as a sign of the company’s confidence in its future prospects and a reward for past loyalty. This builds trust and encourages reinvestment.

For the Company:

• Cost-Effective Capital Raise: Compared to issuing new shares or taking on debt, bonus issues are a cost-effective way to raise capital. Existing shareholders contribute no additional funds, making it a win-win situation.
• Improved Market Image: Distributing bonus shares portrays a positive image of the company, signalling financial strength and stability. This can attract new investors and boost the brand’s reputation.
• Increased Shareholding Base: A wider shareholder base can broaden the company’s investor pool, leading to better market sentiment and potentially higher demand for the stock.

Conclusion

It is important for investors to carefully evaluate the implications of bonus shares and consider their investment goals and preferences before making decisions based on bonus offerings.

Open your free demat account with Angel One and buy the bonus share of your choice today!

Disclaimer: This article is written for educational purposes only. The securities mentioned are only examples and not recommendations.