1:1 bonus share, 1:10 stock split: Multibagger IPO turns ₹13,500 to ₹1.35 lakh in six years
1:1 bonus share, 1:10 stock split: A long term investor not just earns from the stock price appreciation but from other rewards as well that a listed company declares from its reserved capital. This reward could be dividend, bonus shares, stock split, etc. These rewards may not look big in short term but over a period of years, these rewards multifold one's return that leads to whopping return for a long term investors.
To understand the value of long term investing and these rewards, one needs to look at Salasar Techno Engineering shares. This main board initial public offering (IPO). Salasar Techno IPO was launched in July 2023 at ₹108 per share.
A bidder was allowed to apply in lots and one lot of the IPO comprised 125 company shares. After listing on BSE and NSE, the stock has traded ex-bonus for issuance of 1:1 shares and ex-split for 1:10 stock subdivision. As per the information available on BSE website, Salasar Techno shares traded ex-bonus on 13th July 2021 for finalising the beneficiary shareholders of the company for issuance of bonus shares in 1:1 ratio.
Means, a long term investor was awarded one bonus share for every one stock he was holding on bonus share record date. As per the information available on the official website of BSE, Salasar Techno Engineering shares traded ex-split on 27th June 2022 for stock subdivision in 1:10 ratio. This means, stock split beneficiary shareholders' shareholding in the company surged 10 times after the stock split.
As mentioned above, an allottee's shareholding in the company would have been 125 shares at the time of Salasar Techno Engineering share listing. After 1:1 bonus shares, this shareholding went up to 250 shares ( ₹125 x 20). This shareholding further went higher
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