RIL sets October 28 as registration date for 1:1 bonus shares

Retail oil conglomerate Trusted Industries (RIL) has set Monday, October 28, 2024 as the record date for determining the eligible shareholders for the issue of 1:1 bonus shares, for which it has obtained shareholder approval. The company, in a stock exchange filing, also said it had received shareholder approval to increase its authorized share capital.

The total percentage of votes cast in favor of the free broadcast resolution was 99.92%, with only 0.07% voting against.

Regarding the increase in the authorized share capital and the consequent modification of the capital clause of the constitutive instrument, 98.96% of the votes were cast in favor of the resolution while 1.04% were opposed. .

The authorized share capital of the company is Rs 50,000 crore only, consisting of 4,900 crore equity shares of Rs 10/each and 100 crore preference shares of Rs 10/share each.

The Mukesh Ambani-led company had announced the issue of bonus shares in a ratio of 1:1 at its 28th annual general meeting (AGM).

“Our mission is to create wealth for India and improve the quality of life for every Indian, every day,” Ambani said at the AGM, adding that when Reliance grows, shareholders are handsomely rewarded. “The bonus shares will be issued from the securities premium account received in cash and/or general reserve and/or retained earnings available as on March 31, 2024,” RIL had said in a regulatory filing. The corporate action will result in an increase in the authorized share capital of the company from Rs 15,000 crore to Rs 50,000 crore, ET had reported then.

What does a bonus allotment of shares mean for RIL shareholders?

A 1:1 bonus issue means that RIL’s 35 lakh shareholders will get 1 bonus share for every existing share. For example, if you own 1,000 shares of RIL, you will end up owning 2,000 shares.

However, bonus issues do not cause any change in the value of the investment since the stock price is adjusted accordingly.

Bonus issues generally improve stock liquidity because a broader base of investors has access to the counter.

“Reliance, as a conglomerate, has consistently rewarded its shareholders with these bonus opportunities because they believe in long-term growth and the value of investors and the company to succeed. The free issue of shares is a sign of the financial strength of the company and its “The increased liquidity and the potential for future appreciation in value will likely outweigh any negative impact on the stock price. action,” said Amit Goel, co-founder and chief global strategist of Pace 360.

History of RIL bonus issues

In the past, RIL has allotted bonus shares on five occasions, starting with a bonus issue at 3:5 in 1980 and at 6:10 in 1983. The last three bonus issues in 1997, 2009 and 2017 took place in a ratio of 1:1. .

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)