Reliance Industries Ltd. (RIL) shares experienced a 1.1% increase after the company announced that October 28, 2024, would be the record date for its 1:1 bonus share issue. This significant decision received overwhelming support from shareholders, with 99.92% voting in favor of the bonus distribution. The bonus shares will be issued from the company’s premium, reserve, and retained earnings as of March 31, 2024. In conjunction with this announcement, RIL secured approval to enhance its authorized share capital to Rs 50,000 crore.
Investors holding RIL shares before the record date will be eligible for the bonus shares. In an official filing, the company stated, “We want to inform that the company has fixed Monday, October 28, 2024, as the record date for the purpose of determining the equity shareholders of the company eligible for bonus equity shares.” This bonus share issue is a part of RIL’s strategy to enhance shareholder value, reinforcing its commitment to rewarding investors.
The announcement of the 1:1 bonus issue was first made during RIL’s annual general meeting on August 29, 2024, with the board granting its approval on September 5. This marks the sixth bonus issue in the company’s history since its listing and the second in the current decade. The last bonus issue, also in a 1:1 ratio, was approved on September 7, 2017, according to data from the Bombay Stock Exchange (BSE). This consistent practice of issuing bonus shares reflects RIL’s robust financial performance and commitment to its shareholders.
Historical Context of RIL Shares Bonus Issues
RIL’s history of bonus issues dates back to fiscal 1981, when the company issued bonus shares at a 3:5 ratio. This was followed by a 6:10 issue in 1984 and three separate 1:1 issues in fiscals 1998, 2010, and 2018. Each of these actions has contributed to maintaining investor confidence and strengthening the company’s market position. The upcoming bonus issue is expected to further solidify RIL’s standing among its shareholders while also attracting new investors.
RIL shares have traditionally been viewed as a reliable investment, bolstered by the company’s diversified portfolio spanning oil, telecom, and retail sectors. The announcement of the bonus share issue has not only resulted in a positive uptick in share prices but also heightened investor interest in the company’s future growth prospects.
RIL Shares Performance in Q2
For the second quarter of fiscal 2024, RIL reported a marginal 0.3% sequential decline in revenue, totaling Rs 2.31 lakh crore for the three months ending September. Despite this slight dip in revenue, net profit witnessed a substantial growth of 11% quarter-on-quarter, reaching Rs 19,323 crore, up from Rs 17,445 crore in the previous quarter. This impressive profit growth indicates the company’s effective management and operational efficiency, particularly in a challenging economic environment.
Operating income, also known as EBITDA, rose by 0.8% year-on-year, amounting to Rs 39,058 crore, compared to Rs 38,765 crore in the same quarter last year. Furthermore, RIL’s EBITDA margin saw a slight improvement, increasing to 16.9% from 16.7% in the corresponding period of the previous fiscal year. This performance underscores the resilience of RIL shares, reflecting the company’s ability to maintain profitability even amidst fluctuating revenues.
On the National Stock Exchange (NSE), RIL shares surged as much as 1.49%, reaching a peak of Rs 2,728 per share, before ultimately closing 0.75% higher at Rs 2,708.15. This performance stands in contrast to the broader market, with the Nifty 50 index experiencing a 0.34% decline. Over the past year, RIL shares have demonstrated robust growth, rising by 15.53%, and have recorded an increase of 4.55% year-to-date.
The positive sentiment surrounding RIL shares is likely to continue, bolstered by the upcoming bonus issue and the company’s strong financial performance. Investors are optimistic about RIL’s future, particularly as it expands its operations and explores new business opportunities. As Reliance Industries continues to innovate and adapt to changing market dynamics, RIL shares remain a focal point for both current and potential investors, solidifying their position in the stock market.
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