Bonus share issues boom in show of corporate strength

economictimes.indiatimes.com:

companies have announced bonus share offers within a mere six-week span, bringing the total number of bonus issues for 2024 to 35 thus far. That compares with 90 companies that issued bonus shares in the last calendar year. Experts attribute the surge to burgeoning earnings and a brighter business outlook, while cautioning that, in some instances, this may be driven by attempts to artificially inflate stock prices amid a bull market overreaction. They advise a cautious approach in such circumstances.

Bonus shares refer to additional shares that a company distributes to its existing shareholders at no extra cost. These bonus shares enhance liquidity, reduce the per-share value of a stock, and foster greater participation from retail investors, according to market participants.

«The trend of bonus share issuance by companies should be interpreted by investors as a sign of the company's strength and potential for growth,» said Dinesh Thakkar, chairman of Tradebulls Securities.
May break 2022 record of 124 issues
«Bonus shares can increase market liquidity and make the company more appealing to prospective investors, without depleting the company's cash reserves,» said Thakkar of Tradebulls.

Capri Global, Newgen Software Technologies, Gujarat Ambuja Exports, Paisalo Digital, KPI Green Energy, Sandur Manganese & Iron Ores, Allcargo Logistics, SG Mart, Choice International, Salasar Techno Engineering and KP Energy are among those that have either given out bonus shares or announced a record date for their issuance.
T