{"id":26169,"date":"2026-04-14T12:18:55","date_gmt":"2026-04-14T06:48:55","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=26169"},"modified":"2026-04-14T15:16:14","modified_gmt":"2026-04-14T09:46:14","slug":"bonus-issue","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/bonus-issue\/","title":{"rendered":"Bonus Issue"},"content":{"rendered":"<h2><b>Bonus Issue Latest News<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">India\u2019s largest insurer, Life Insurance Corporation of India, recently announced the first ever bonus issue.<\/span><\/p>\n<h2><b>About Bonus Issue<\/b><\/h2>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">A bonus issue, also known as a <\/span><b>scrip issue or a capitalization issue,<\/b><span style=\"font-weight: 400;\"> occurs when a <\/span><b>company<\/b><span style=\"font-weight: 400;\"> listed on a stock exchange <\/span><b>decides to offer free additional shares to the existing shareholders.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The <\/span><b>company decides the number of bonus shares to be allotted <\/b><span style=\"font-weight: 400;\">to every individual investor for holding a certain number of shares over a set period of time and accordingly rewards them.<\/span><\/li>\n<li style=\"text-align: justify;\"><b>For example:<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>In a 2:1 bonus issue, you get two extra shares for every one share<\/b><span style=\"font-weight: 400;\"> you already own.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">If you had 10 shares, after the bonus, you\u2019ll hold 30 shares.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">However, the s<\/span><b>hare price will drop proportionally<\/b><span style=\"font-weight: 400;\"> so that your t<\/span><b>otal investment remains the same.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">This bonus issue aims to <\/span><b>attract further investment and reward its existing shareholders <\/b><span style=\"font-weight: 400;\">as it <\/span><b>improves the entity\u2019s market image.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">A bonus issue of shares will <\/span><b>increase a company\u2019s share capital but not its market capitalisation.<\/b>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Market capitalisation is calculated by multiplying the company\u2019s current stock price and the total number of outstanding shares. Share capital is the amount that the company raises by issuing shares.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">By issuing bonus shares, the number of outstanding shares increases with a proportional decrease in the value of each share, ensuring no change in the market capitalization. However, the face value of the shares remains unchanged.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Bonus shares <\/span><b>do not dilute shareholders\u2019 equity<\/b><span style=\"font-weight: 400;\"> because they are<\/span><b> issued in a constant ratio that keeps the relative equity <\/b><span style=\"font-weight: 400;\">of each shareholder the<\/span><b> same as before the issue.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The important thing to note is that companies <\/span><b>issue bonus shares from their reserves or retained profits. Instead of paying out cash<\/b><span style=\"font-weight: 400;\">, they <\/span><b>convert their saved earnings into shares and distribute them <\/b><span style=\"font-weight: 400;\">among shareholders.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The <\/span><b>issuance of bonus shares is not taxable<\/b><span style=\"font-weight: 400;\">; however,<\/span><b> shareholders must still pay capital gains tax if they sell them for a net gain.<\/b><\/li>\n<\/ul>\n<h2><b>What is a Stock Split?<\/b><\/h2>\n<ul>\n<li><span style=\"font-weight: 400;\">A stock split is an action taken in which a <\/span><b>company divides its existing shares into multiple shares to boost the liquidity of shares.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">A split is usually<\/span><b> undertaken when the stock price is high, making it pricey for investors to acquire.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">It <\/span><b>brings down the share price <\/b><span style=\"font-weight: 400;\">as the number of shares increases.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The<\/span><b> market cap of the firm and the value of each shareholder\u2019s investment stay unchanged <\/b><span style=\"font-weight: 400;\">after a stock split.<\/span><\/li>\n<\/ul>\n<p><strong>Source: <a href=\"https:\/\/www.financialexpress.com\/market\/free-shares-for-lic-shareholders-board-approves-first-ever-11-bonus-issue-check-details-4206488\/\" target=\"_blank\" rel=\"nofollow noopener\">FE<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bonus Issue occurs when a company listed on a stock exchange decides to offer free additional shares to the existing shareholders. Read more about Bonus Issue, Meaning, Example, Impact, Latest News.<\/p>\n","protected":false},"author":5,"featured_media":98223,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[6850,21,22,23],"class_list":{"0":"post-26169","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-bonus-issue","9":"tag-prelims-pointers","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/26169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=26169"}],"version-history":[{"count":3,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/26169\/revisions"}],"predecessor-version":[{"id":98276,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/26169\/revisions\/98276"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/98223"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=26169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=26169"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=26169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}