RIL sets October 28 as record date for 1:1 bonus share

Oil-to-retail conglomerate Reliance Industries (RIL) has set Monday, October 28, 2024, as the record date for determining shareholders eligible for the issuance of 1:1 bonus shares, for which it received shareholder approval. The company also said in a filing with the stock exchanges that it has received shareholder approval for increasing the authorized share capital.

The total percentage of votes cast in favor of the bonus issuance resolution was 99.92%, while only 0.07% voted against.

Regarding the increase in the authorized share capital and the consequent amendment of the Capital Clause of the Memorandum of Association, 98.96% of the votes were cast in favor of the resolution, while 1.04% were against it.

The registered capital of the company is Rs 50,000 crore, consisting solely of 4,900 crore equity shares of Rs 10/each and 100 crore preference shares of Rs 10/share each.

The Mukesh Ambani-led company had announced the issuance of bonus shares in a 1:1 ratio at its 28th Annual General Meeting (AGM).

“We are in the business of creating wealth for India and improving the quality of life of every Indian, every day,” Ambani had said at the AGM, adding that when Reliance grows, shareholders will be richly rewarded. issued from securities premium account received in cash and/or general reserve and/or retained earnings available from March 31, 2024,” RIL said in a filing with the regulator. The corporate action will lead to an increase in the company’s registered capital from Rs 15,000 crore to Rs 50,000 crore, ET subsequently reported.

What does an issue of bonus shares mean for RIL shareholders?

A 1:1 bonus issue means RIL’s 35 lakh shareholders will get 1 free share for every existing share. For example, if you own 1,000 shares of RIL, you will end up owning 2,000 shares.

However, bonus issues do not result in a change in investment value as share prices are adjusted accordingly.

Bonus issues generally improve the liquidity of the stock by allowing a broader group of investors to access the counter.

“Reliance as a conglomerate has consistently rewarded its shareholders by offering these bonus opportunities as they believe in long-term growth and value of both the investors and the company to achieve success. The issuance of bonus shares is a sign of the company’s financial strength and its commitment to returning value to shareholders is likely to outweigh any negative impact on the share price,” said Amit Goel, co-founder and Chief Global Strategist of Pace 360.

History of RIL bonus issues

In the past, RIL has given bonus shares five times, starting with a 3:5 bonus issue in 1980 and 6:10 in 1983. The last three bonus issues in 1997, 2009 and 2017 were at a 1:1 ratio. .

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