Railway PSU Major RITES Ltd. has informed the exchanges that it will hold a board meet on Wednesday (July 31) to consider an issue of bonus shares.
Along with that proposal, the board will also consider earnings for Quarter 1 and a first interim dividend for the financial year 2024-25.
Record date for the said bonus issue is yet to be determined.
Earlier in 2019, the company had earlier declared a 1:4 bonus issue. Shareholders received one free share for every four they held as of the record date.
BSE Filing stated “This is furtherance to our letter of even no. dated 23.07.2024 regarding intimation of Board Meeting scheduled to be held on Wednesday, 31st July, 2024 inter alia, to consider and approve the Standalone and Consolidated Unaudited Financial Results of the Company for the quarter ended on 30th June, 2024 and for consideration of payment of First Interim Dividend, for the F.Y 2024-25, If any.
In this connection, it is further informed that the Board of Directors of the Company may also consider the proposal for issuance of Bonus shares in the aforesaid Board Meeting. Since, the Trading window is already closed for the purpose of consideration and approval of Financial Results, the same period will also apply for Bonus share issue, if any.”
What is Bonus Issue ?
Bonus shares are additional shares given to the current shareholders without any additional cost, based upon the number of shares that a shareholder owns. These are company’s accumulated earnings which are not given out in the form of dividends, but are converted into free shares.
The basic principle behind bonus shares is that the total number of shares increases with a constant ratio of number of shares held to the number of shares outstanding. For instance, if Investor A holds 100 shares of a company and a company declares 4:1 bonus, that is for every one share, he gets 4 shares for free. That is total 400 shares for free and his total holding will increase to 1000 shares.
