Patanjali Foods shares in focus as stock turns ex-bonus for 2:1 issue on record date today

Synopsis

Patanjali Foods' shares turned ex-bonus on Thursday, September 11, following a 2:1 bonus issue. Shareholders who held the stock by Wednesday's close are eligible to receive two additional shares for each share owned. While the bonus issue expands holdings, the stock's performance has been mixed, with a year-long decline contrasting recent gains over the past three months.

Patanjali Foods shares will be in focus on Thursday, September 11, as the stock turns ex-bonus from today. The company had recently declared a 2:1 bonus issue, under which shareholders will receive two additional equity shares for every one share held as on the record date.

The record date for the bonus issue has been fixed as September 11, and only investors who already hold shares as of the close of trading on Wednesday will be eligible.

In the Indian stock market, trades are settled on a T+1 basis, which means investors need to complete their purchase by September 10 for their names to reflect on the company’s books by the record date.

Buying shares on or after September 11 will not entitle investors to the bonus shares.

Bonus shares are issued by companies by capitalizing their free reserves, securities premium, or retained earnings. While the overall value of an investor’s holding does not change immediately after the issuance, the number of shares held increases, and the stock price usually adjusts in proportion to the bonus ratio. For Patanjali Foods shareholders, the 2:1 ratio will significantly expand their holdings without requiring fresh investment.

The bonus shares, once allotted, will be credited directly into the demat accounts of eligible shareholders in due course. Those who missed Wednesday’s deadline will not be entitled to this bonus issue and will have to wait for any future such corporate actions by the company.

Over the past year, the shares of Patanjali Foods have declined by 7.23%, while on a year-to-date (YTD) basis, they are down 0.83%. In the last six months, however, the stock has gained 2.48%, and in the past three months, it has risen by 6.29%. On a one-month basis, the stock is lower by 0.64%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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