Reliance Industries Ltd will remain in focus on Thursday as its board meets to consider a 1:1 bonus issue to shareholders.
Last week, the oil-to-chemicals conglomerate said the company's board would consider and recommend to shareholders, for their approval, the issue of bonus shares by capitalization of reserves.
At the time of publishing, the stock was trading little-changed at Rs 3,028 on the NSE. Here are key takeaways on Reliance Industries and the implications of a bonus share issue for investors.
Index heavyweight: Reliance is the most valuable company in India with a market capitalization of Rs 20.46 lakh crore.
Bonus announcement: According to the filing, every shareholder will get one free share for each held.
RIL bonus history: This will be the fifth time the company will reward shareholders with a bonus share. Earlier, it distributed bonus shares in 1983, 1997, 2009 and 2017.
Impact on shareholders: Bonus issues improve stock liquidity, helping reach a broader investor base. However, the company's value remains unchanged, though it may impact the share price in the short term as an issue of additional shares by the company to shareholders will lead to an increase in the number of shares in the market.
Impact on promoters: Mukesh Ambani and his family are the promoters of Reliance Industries, with a holding of 50.33 percent stake in the company as of June 30. They will also be eligible for the bonus once the board approves at Thursday's meeting.
Record date announcement: The board is also likely to fix the record date to determine the eligibility of the shareholders for the corporate action.
RIL stock returns: The shares have delivered impressive returns of 16.9 percent year-to-date and 24.9 percent over the past 12 months, according to BSE data.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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