Two 1:1 bonus issues, 1:2 stock split: Multibagger SME IPO turns ₹1.2 lakh to ₹20.5 lakh in eight years

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Bonus shares, stock split effect: Investing in stocks or public issues is like investing in business. As per majority of the successful stock market investors, one should try and hold one stock as long as one can becuase it helps an investor to get some extra benefit that a listed company announces from its capital reserves. These rewards could be in the form of bonus shares, dividends, buyback of shares, stock split, etc.

Prima facie, these rewards may not look big, but in long term, these rewards lead to whopping return on one's money. To understand how these rewards can change your fortunes in long term, you need to look at the journey of Star Housing Finace Ltd from primary market to secondary market. The non-banking financial company (NBFC) launched its public issue February 2015 at a fixed price of ₹30 per equity share.

The public issue was proposed for listing on BSE SME exchange. One lot of the SME IPO comprised 4,000 company shares. The SME stock listed on 20th March 2023 at ₹32 apiece levels and ended at ₹31.75 per share after making intraday low of ₹31.50 on listing date.

So, the SME stock listed at limited premium and ended higher from the issue price on share listing date. Yet, if an investor had remained invested in this stock till date despite positive debut, one would have benefited from two bonus issues and one stock split declared by the company in next eight years. As per the information available on official BSE website, Star Housing Finance Limited issued bonus shares on two occasions.