30 Apr 07 BHEL to issue bonus shares
The board of directors of BHEL, at their meeting held today, recommended a bonus issue of shares (also known as stock dividend) in the ratio of 1 : 1 (1 share for every 1 share held), to the existing shareholders of BHEL as appearing in the company’s register of shareholders, on the record date, which will be announced in a few days time. The bonus issue will be made by capitalising the free reserves of BHEL.
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will i be eligible for the bonus if i buy the share tomorrow and sell those shares on june 4th that is a day after record date…let me know as soon as possible
sir,
i bye today 150 shares in f&o are you giving bonus share
@ Vinod – No Vinod. F&O contracts won’t recieve dividend, bonus issue, rights and other such shareholder benefits.
@Ragu – Yes you will be eligible for the issue of bonus shares
@Bullish Indian– what wil be the price of BHEL on june 4th that is a day after record date…Tel me price of BHEL before Record Day and after Record Day. Thanks in Advance.
Before ex date the price of BHEL cannot be predicted since it depends on the forces supply and demand and market dynamics. After the ex date and on/after the record date the price will correct to adjust the increase in the number of shares. so if it is 1:1 bonus then prices will fall by hald (approximately) on the ex date.
@Bullish Indian- Thanks for the response.I have one more doubt regarding issue of bonus shares.You say that share price will correct post record date but look at the shares like Ansal Properties and Karuturi networks which are trading post record date have not corrected.What is the reason behind this?Please explain?
@ Ragu – You are welcome. The prices will correct on the Ex Bonus date and not on the record date. Similarly prices will also correct by the amount of dividend paid on the Ex Dividend date. Do have a look at historic prices and let me know if you have any queries.
hello bullishindian. what do u think will happen to BHEL in these 7 days before the bonus issue date? I predict at lease 10% surge.What are ur comments?
@mysterious reagent – Hello, Good prediction. I think BHEL has already appreciated by 10% from the time you posted this comment. I think there is some more steam left in it. Cheers!
when will the bonus shares be credited to the demat account?
It may take upto 1 month from the record date for you to receive the BHEL bonus shares in your demat account.
My thinking was BHEL record date for bonus share is on 31st May. I had 10 shares of BHEL which I sold on 1st June ‘07 for 50% price of 31st May. Later on I realised that bonus record date is 1st June.
Please let me know whether I will get the bonus share. Please note I have sold it for 50% of the value at around 3.00 PM in the afternoon on 1st June.
Appreciate your reply.
@ Kini – You will get the bonus shares. You need not wait till record date to sell the shares. You can sell it on the ex bonus date itself and get the bonus shares. This is because it will take atleast 2 days for the new owners’ name to get updated in the company’s shareholders register. So on the record date your name (and not the new owner’s name) will appear there and hence you will get the bonus shares.
Dear Sir,
I was not knowing the BHEL share price would fall to half immediately on declaration of bonus shares.If so what is the use of bonus share, it is as good as stock split.Now the bonus shares are not yet credited to my Demat and by the time they are credited and then I sell them I may infact lose money ( in these uncertain markets) than had I sold them just before the declaration of bonus shares on 29th May 07 when BHEL share price was at its peak. What is really the benefit of these bonus shares ?
Thanks
@Babji – Bonus issue is just a process of capitalisation of free reserves. This being the case, there is no increase in either earnings or book value of the company. But in a 1:1 Bonus issue, since number of outstanding shares double, the EPS and BV per share will fall by 50% and hence price falls by about 50%. History stands testimony to the fact that after the bonus issue announcement is made, the share price of that particular company is likely to outperform the overall market. This is because bonus issue increases number of outstanding shares and hence improves liquidity. Also investors perceive bonus issue as an indication that the company is dowing well.
Hi,
I am an amature investot. I have a question. I had bought BHEL shares on 31st of May, will I still get the bonus shares?
Thank you.
Sir, Let me know the record date and no of bonus shares declared by
(1) Reliance Industries bonus issue
(2)GAIL bonus issue
(3)PRAJ bonus issue
Thanks,
Pranab
Bullish India – question for you. I am taking the GAIL bonus announcement as a case example. Now they havent yet disclosed the date till which one has to hold the shares, to get the bonus. However, the market is behaving as if that date has been announced (its already bringing down the value of the stock to reflect fair price). How is this working…?
You are doing a terrific job. keep it up dude…