1:2 bonus shares, 1:10 stock split: BSE SME IPO turns ₹1.28 lakh to ₹8.76 lakh in nine years

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Multibagger IPO: A long-term stock market investor does not just earn from the appreciation in stock price appreciation but from the various other rewards that a listed company declares from its capital reserves. These rewards can be in the form of an interim, final, or special dividend, bonus shares, stock split, buyback of shares, etc. Prima facie, these rewards may look negligible but in the longer term, these rewards matter a lot and lead to whopping returns.

This rule applies to both primary and secondary markets. To understand how these rewards impact one's returns, we need to look at the Garment Mantra Lifestyle shares. The initial public offering (IPO) of Garment Mantra Lifestyle Ltd was launched in June 2015 at a fixed price of ₹16 apiece.

Also Read: Yes Bank shares rebound after retracing over 20% from 52-week high. Buy or wait? The lot size of this BSE SME IPO comprised 8,000 company shares, which means the minimum money required to apply for this SME IPO was ₹1.28 lakh ( ₹16 x 8,000). If an allottee had remained invested in this SME stock despite strong listing, one would have enjoyed some other benefits like stock split and bonus shares that the SME company announced in 2022 and 2020 respectively.

As per the information available on the BSE website, the SME stock traded ex-bonus on 30th March 2020 after declaring bonus shares in a 1:2 ratio. This means Garment Mantra Lifestyle shareholders who held this SME stock on the bonus share record date, were awarded one bonus share for every two shares they held. Also Read: GPT Healthcare IPO: GMP, review, subscription, other details.