HDFC AMC shares adjust to 1:1 bonus issue: Here’s why you should ignore the 50% plunge

The shares of HDFC Asset Management Company appeared to have crashed around 50 percent in a single day on November 26. This is because the stock adjusted to a 1:1 bonus issue which was earlier announced by the company.

After closing at Rs 5,336.50 apiece on November 25, the stock opened nearly 50 percent lower at Rs 2,682 apiece on November 26. The stock in practical terms was trading in the green with marginal gains at Rs 2,670 apiece at 10.40 am on NSE.

 

What is a bonus issue?

A bonus issue of shares means that eligible shareholders would receive one bonus share for every share of the company they own, as on record date. Bonus issue essentially are free shares offered by a company from its reserves. Such issue is perceived to reflect on a firm's strong financials and growth potential.

While the issue of bonus shares increases the total number of shares issued and owned, it does not change the market capitalization of the company. This increases the overall liquidity of the stock, and makes it more affordable for other investors to add to their portfolio, creating strong upside potential for the stock.

 

Record date for bonus issue:

HDFC AMC had set November 26 as the record date to determine the eligibility of the shareholders set to receive the bonus issue. This means that bonus shares will be handed over to those shareholders who own shares of the company as on November 26.

 

HDFC AMC financial performance:

The company had announced its bonus issue while releasing its Q2 results on October 15 this year. he company reported a net profit of Rs 718.43 crore for the second quarter of the financial year 2026. This marks a rise of nearly 25 percent year-on-year (YoY) from the Rs 576.61 crore net profit reported in the same period last year.

The firm's revenue from operations meanwhile rose around 16 percent YoY to Rs 1,027.40 crore during the quarter under review. It had earlier reported revenue from operations at Rs 887.21 crore in the corresponding quarter of the previous financial year.