Upcoming Bonus Issues and Buybacks This Week

Bonus Issues

Bonus issues, also referred to as "free share offers," occur when companies distribute additional shares to their existing shareholders at no cost. For instance, if you own ten shares, the company may grant you one extra share as a bonus.

These bonus issues increase the total number of shares available to shareholders without changing the overall value of the company. Companies typically use retained earnings or previously held shares for this purpose. While bonus shares themselves are not taxed when issued, any gains from selling them later might be subject to taxation.

Below are the companies that have announced a bonus issue for the upcoming week:

    • PVV Infra has declared a bonus issue in the ratio of 1:1, with shares trading ex-bonus on August 20.
    • Sprayking has declared a bonus issue in the ratio of 1:1, with shares trading ex-bonus on August 21.
    • Garment Mantra Lifestyle has declared a bonus issue in the ratio of 1:1, with shares trading ex-bonus on August 23.

Each shareholder receives bonus shares proportional to their current holdings, so their ownership percentage remains unchanged. For example, in a two-for-one bonus issue, for each share you own, you would receive two additional shares. If you originally held 100 shares, you would receive 200 extra shares (100 × 2 = 200).

Buybacks

A buyback occurs when a company repurchases its own shares from existing shareholders. This can be done through a tender offer, the open market, or odd-lot holders. The buyback offer price is typically higher than the market price.

The following companies have announced a buyback for the upcoming week:

    • Chaman Lal Setia Exports will announce a buyback of shares on August 19.
    • AIA Engineering Ltd will announce a buyback of shares on August 20.
    • Symphony will announce a buyback of shares on August 21.
    • Mayur Uniquoters will announce a buyback of shares on August 23.

Disclaimer: The information provided in this article is intended solely for informational purposes and should not be construed as investment advice. Please consult with your financial advisor before making any investment decisions.