This cigarette-maker announces 2-for-1 bonus issue: What it means for shareholders?

Godfrey Phillips on August 4 announced its first-ever bonus issue of equity share. Every shareholder owning 1 share of the company as on the record date, will receive two bonus shares following the issuance of the additional shares.

A company announces bonus issue of shares to reward its existing shareholders with an investment opportunity, which is perceived to be attractive. 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.

The issuance of bonus shares will likely increase investors' confidence for the stock, as it reflects on the firm's strong financials and growth potential. Bonus issue essentially are free shares offered by a company from its reserves. Investors must own shares of the company as on the record date to be eligible for the bonus issue. (Representative image)

Godfrey Phillips said that it will use nearly Rs 20.8 crore from its general reserves and/or retained earnings for implementing the bonus issue. Following the bonus issue, the paid up share capital of the company will stand at Rs 31.2 crore, divided into nearly 16 crore shares. Currently, prior to the bonus issue, its paid up share capital stands at Rs 10.4 crore, divided into 5.2 crore shares.

Godfrey Phillips has set September 16 as the record date to determine the eligibility of the shareholders set to receive the bonus shares. Investors must own the shares of the company as on the record date in order to be eligible to receive the bonus shares.  

The shares of Godfrey Phillips rallied nearly 10 percent to hit a fresh all-time high level on August 5 after the firm released its results for the first quarter of the April-June quarter of the ongoing financial year 2026. The firm also announced a bonus issue for its shareholders.

The tobacco manufacturer on August 4 reported a 64 percent on-year jump in net profit to Rs 365 crore for the April-June quarter of FY26. It had reported a net profit of Rs 223 crore in the year-ago period. The firm's revenue meanwhile rose 34 percent on-year to Rs 1,807 crore in Q1FY26, as against Rs 1,352 crore a year ago.

Godfrey Phillips shares have gained more than 7 percent in the past five days, and nearly 16 percent in the past one month. The stock rallied more than 112 percent in the past six months, and is up over 96 percent in 2025 so far.