Reliance Industries Ltd (RIL) stated on Thursday that its board has accepted a proposal to issue bonus shares at a 1:1 ratio. This was the sixth bonus offering by the most valuable business on Dalal Street. The Mukesh Ambani-led corporation stated that the record date would be communicated separately. Following the event, RIL shares were trading 1.54% down at Rs 2,983.10.
Bonuses are exclusively given to current stockholders. It diminishes the company's free reserves and surplus while increasing the total number of existing equity shares. Corporate activity causes a decrease in per share ratios such as EPS and book value per share. As a result, the share price declines in proportion to the amount of bonus shares distributed.
In a stock exchange filing, Reliance Industries stated that its board of directors has recommended to shareholders for their approval, through postal ballot: "The issue of bonus shares in the ratio of 1:1, i.e. 1 (one) new fully paid-up equity share of ₹ 10/- (Rupees Ten Only) each for every 1 (one) existing fully paid-up equity share of ₹ 10/- (Rupees Ten Only) each, to the eligible equity shareholders of the company as on the record date, by capitalization of securities."
Reliance Industries said that the bonus shares will be awarded from the securities premium account received in cash, the general reserve, and/or the retained profits available as of March 31, 2024.
RIL's previous bonus issue was in calendar 2017, and the stock has risen 318 percent since then, reaching Rs 3,015-odd on Wednesday, up from Rs 725.65 on September 7, 2017, the day the 1:1 issue expired. Reliance Industries had disclosed a comparable bonus share ratio for its 2009 offering. On November 26 of that year, the stock reached its ex-date. The 1997 bonus issue was proclaimed at a 1:1 ratio. Bonus shares were given at a 6:10 ratio in 1983 and 3:5 ratio in 1980. In addition, the corporation issued five rights offerings, the most recent of which occurred in May 2020.
Meanwhile, the RIL board requested shareholder permission to boost the company's permitted share capital from Rs 15,000 crore to Rs 50,000 crore.
It allowed the forfeiture of partially paid-up equity shares of RIL for which call money (first call, second and final call, or both) has yet to be paid. If the call money is not paid by September 20, 2024, it will be forfeited, according to RIL.
