On Monday, Hindustan Petroleum Corporation Limited (HPCL), a government-owned entity, announced that its board of directors might discuss a proposal to recommend bonus equity shares and set a record date on Thursday, May 9. This discussion will coincide with the board’s meeting to approve the company’s financial results for the quarter ending on March 31, 2024.
HPCL has arranged a board meeting on May 9, 2024, to deliberate and authorize the issuance of bonus shares to its shareholders.
The company has not yet announced the record date for distributing bonus shares. Additionally, it will disclose its financial results for the quarter ending on March 31, 2024.
Bonus Share Issuance: Utilization and Impact:
If sanctioned by the board, this will mark the third instance of the company distributing bonus shares to its shareholders. Previously, in 2016, it distributed bonus shares at a ratio of 2:1, granting shareholders two additional shares for each share owned. Moreover, in 2017, the company conducted another bonus share issuance at a ratio of 1:2.
Firms issue bonus shares to utilize their accumulated free reserves, boost their Earnings Per Share (EPS), increase their paid-up capital, and at the same time reduce their reserves. Shareholders receive these shares at no additional cost, often termed as complimentary shares or free shares.
Investors who buy the stock before the ex-date are eligible for bonus shares. Those acquiring shares on or after the ex-date will not be eligible for bonus shares.
Hindustan Petroleum’s stock concluded around 4% lower at ₹513.65 per share on the NSE. In the last 12 months, HPCL shares have soared by more than 100%.
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