NSE board to take up bonus issue on May 3
Summary
A bonus issue is a sign of the company’s expanding equity and increasing liquidity, but as per experts, this should not be the only indicator of performance.
The National Stock Exchange (NSE) on Monday (April 29) said its board of directors will consider a proposal to issue bonus shares to investors on May 3, 2024.
“…the Board of Directors at its above-referred meeting (i.e. meeting scheduled on Friday, May 03, 2024) would also consider a proposal for issue of Bonus Shares by way of capitalization of reserves including an increase in the Authorized Share Capital of the company, subject to necessary approvals, as required,” according to a stock exchange filing.
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Further, the board of NSE will discuss the approval of the annual audited financial results for the fiscal year ending March 31, 2024.
“An announcement was made on April 26, 2024, informing that a meeting of the Board of Directors of the Company scheduled on Friday, May 03, 2024, inter-alia, to consider and approve the annual audited financial results of the Company (both stand-alone and consolidated) for the year ended as on March 31, 2024, along with the Statutory Auditors’ Report, and to recommend the final dividend, if any, for the financial year 2023-24,” the company added.
What is a bonus issue?
A bonus issue is a sign of the company’s expanding equity and increasing liquidity, but as per experts, this should not be the only indicator of performance — one’s decision should be made only after analysing the company’s fundamentals. Conditions like the issue must be authorised by the articles of the company, and a recommendation on the same should be made by the board of directors, once approved by all shareholders.
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In the long run, the share price depends on the fundamentals and growth prospects of the company. Buying bonus shares purely on the basis of expected bonus shares should be avoided unless one is clear about the fundamentals of the company you are investing in.
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