The Board of Directors of Nestlé India Limited has approved the issuance of bonus equity shares in the ratio of 1:1, the company announced in a stock exchange filing on June 26, 2025. This means that eligible shareholders will receive one new bonus equity share of ₹1 face value for every one existing equity share they hold on the record date.
The board meeting, which commenced at 9:30 A.M. and concluded at 9:55 A.M. (IST), also approved proposals to increase the company's authorised share capital and to convene an Extraordinary General Meeting (EGM) to seek shareholder approval for these matters.
| Particulars | Details |
|---|---|
| Bonus Ratio | 1:1 (One bonus share for every one share held) |
| Face Value per Share | ₹1 |
| Capitalisation Amount | ₹96,41,57,160 (from retained earnings) |
| Record Date | To be announced in due course |
| Estimated Credit Date | On or before August 25, 2025 |
Key Decisions in Detail
The board's approval encompasses several key corporate actions, all subject to the approval of the company's members.
1. Bonus Share Issue: The company will issue 96,41,57,160 new equity shares of ₹1 each. This will be funded by capitalising a sum not exceeding ₹96.41 crore from the company's retained earnings (free reserves). The issuance is based on the audited financial statements for the year ended March 31, 2025, which show retained earnings of ₹4,008.95 crore, indicating sufficient reserves to cover the bonus issue.
2. Increase in Authorised Share Capital: To accommodate the new bonus shares, the board has proposed to alter the Capital Clause of the Memorandum of Association. This will double the authorised share capital from ₹100 crore to ₹200 crore.
3. Extraordinary General Meeting (EGM): An EGM will be convened on Thursday, July 24, 2025, through video conferencing or other audio-visual means (VC/OAVM). The primary agenda of the EGM will be to obtain shareholder approval for the bonus issue and the increase in authorised capital. The notice for the EGM will be sent to shareholders in due course.
Impact on Share Capital
The 1:1 bonus issue will effectively double the company's paid-up and subscribed share capital, while the authorised capital is being increased to facilitate this expansion.
| Share Capital | Pre-Bonus Issue (No. of Shares) | Post-Bonus Issue (No. of Shares) | Face Value (₹) |
|---|---|---|---|
| Authorised | 100,00,00,000 | 200,00,00,000 | 1 |
| Paid-up | 96,41,57,160 | 192,83,14,320 | 1 |
| Subscribed | 96,41,57,160 | 192,83,14,320 | 1 |
Timeline and Approvals
The process for the bonus issue is now set in motion, contingent on shareholder consent. The estimated date for the credit or dispatch of the bonus shares is on or before August 25, 2025, which is within the regulatory timeline of two months from the date of the board's approval.
Market Context
Bonus issues are generally viewed positively by the market as they reflect a company's strong financial position and management's confidence in future earnings. By increasing the number of shares in circulation, a bonus issue enhances the stock's liquidity and makes it more accessible to retail investors due to a lower per-share price post-adjustment. While a bonus issue does not change the fundamental valuation of the company, it is often perceived as a reward to long-term shareholders.
Nestlé India trades on the BSE under the scrip code 500790 and on the NSE with the symbol NESTLEIND.
