Bonus Shares in November 2023

What Are Bonus Shares?

Bonus shares are free additional shares that companies give to their existing shareholders. For instance, if a company declares a 2:1 bonus share issuance, each shareholder receives two bonus shares for every share of the company they possess on the record date.

Bonus Stocks in November 2023

D. P. Wires Ltd.

D. P. Wires is a company that manufactures steel wires, plastic pipes and plastic films. These products find their application in industries like oil & gas, power, environment, civil, energy, automobile, infrastructure, etc. Its manufacturing is done in a single premise at the Industrial Estate, Ratlam.

Key Financials:

Market Cap.: ₹885 crore

P/E Ratio: 19.90
5-Year CAGR: 49.18%

Giriraj Civil Developers Ltd.

The company is engaged in the business of civil works contracting and engineering. It concentrates on railway sector projects, where there is a wide scope of work in the construction of foot-over bridges, platform extensions, sick line sheds, stabling lines, etc.

Key Financials:

Market Cap.: ₹637 cr

P/E Ratio: –
5-Year CAGR: 96.54%

Jeena Sikho Lifecare Ltd

The company is well known for its ayurvedic ‘Shuddhi Clinics’. In 2009, the company was started as a ‘Jeena Sikho God Grace Foundation’. In 2020, the company opened its first Ayurvedic ‘Panchkarma hospital’. Apart from this, it manufactures Ayurvedic products such as Divya Kit, Ayurvedic Nervous Care Pack, Ayurvedic Lungs Care Pack, Ayurvedic Hair Pack, Ayurvedic Weight Gain Pack, etc.

Key Financials:

Market Cap.: ₹2,034 crore

P/E Ratio: –
5-Year CAGR: 51.93%

Why Do Companies Issue Bonus Shares?

There are several reasons why companies issue bonus shares:

1. One reason is to reward shareholders for their loyalty and investment without spending too much on dividend payouts. 
2. Another reason is to increase the number of shares in circulation while the market capitalisation remains the same. This can lead to increased liquidity of the company’s stock and make it more attractive to retail investors.

Are Bonus Shares Beneficial for Investors?

Bonus shares are exempt from taxation, and they increase the number of shares an investor owns in the company. This can lead to higher profits if investors sell their bonus shares to generate cash.

Market capitalisation is the total value of all of a company’s outstanding shares. Bonus shares simply increase the number of shares outstanding, but they do not change the total value of those shares.

However, bonus shares can lead to a decrease in share prices. This is because the company is issuing more shares without much change in its revenues. This increases the supply of shares, which can drive down prices.

Conclusion

Do you want to buy a stock that may soon provide you with bonus shares? If yes, 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.