IRB Infra shares rise after adjusting for bonus issue — All you need to know

Daily Update, Business

In this case, if shares o f IRB Infra were in your demat account on Friday, will make you eligible to attain the bonus shares. Buying them today or on Wednesday, would leave you ineligible for any bonus shares.

IRB Infrastructure Developers Ltd Shares surged as much as 6% on Monday, March 30, as the stock started trading adjusted for the bonus issue of shares. The bonus issue was announced by the company last month.

The company has fixed Wednesday, April 1, as the record date for the bonus issue. Monday will be the ex-date for the same.

Ex-date is one business day before the record date. Shareholders need to purchase the shares before the ex-date to be eligible for the corporate action that the company has announced, whether it will be a bonus issue, or dividends, or even a stock split.

A Record Date is when the company verifies the eligible stakeholders for the corporate action. If you buy shares on or after the ex-date, you will not be eligible for the proposed corporate action.

In this case, if shares of IRB Infra were in your demat account on Friday, will make you eligible to attain the bonus shares. Buying them today or on Wednesday, would leave you ineligible for any bonus shares.
IRB Infra Bonus Issue

IRB Infra had approved a bonus issue in the proportion of 1:1 on February 13 this year. This means qualifying shareholders will receive one bonus share for every one share they own as on the record date.

This is the first instance of the company announcing a bonus issue for shareholders, as it previously carried out a stock split in February 2023, where it split one share of ₹10 into 10 shares of ₹1 each.

How Do Bonus Issues Work

For example, a shareholder has 100 shares of IRB Infra as of the record date and a 1:1 bonus issue would mean that the shareholder would receive an additional 100 shares in lieu of the 100 already owned.

This will take the shareholder’s tally to 200 shares and the stock price will adjust according to the proportion of the bonus issue announced.

Shares of IRB Infra finished 0.8% lower on Friday at ₹40.8. The stock has declined 11% over the last 12 months.

Triton Valves has declared a bonus issue in the ratio of 3:1, while IRB Infrastructure Developers has declared a bonus issue in the ratio of 1:1. Both the companies have set April 1 (Wednesday) as the record date for their respective bonus issue of stocks. This means that investors must own the shares of the companies in their demat accounts on Wednesday in order to be eligible to receive the bonus shares.

Markets will remain closed on March 31(Tuesday) as on account of Shri Mahavir Jayanti. This means that the shares must be purchased latest by March 30 so that they are credited to the shareholders’ accounts by April 1, as per the T+1 settlement norm.

Bonus issues consist of free shares distributed by a company from its reserves and are frequently seen as a sign of strong financial health and growth prospects. While the issue of bonus shares increases the total number of outstanding shares, it does not change the company’s market capitalisation. However, it can improve liquidity and affordableness, allowing more investors to add shares of the company to their portfolio.

Triton Valves bonus issue

Triton Valves manufactures and supplies valves and components for tires and many other products. While declaring its quarterly results this February, Triton Valves announced the 3:1 bonus issue in order to celebrate its 50th year of operations. It will utilize Rs 384.16 crore from its securities premium account for the bonus shares.

The shares of the company have fallen around 2% in the last five days, but gained more than 9% in the last six months. The company’s market capitalization presently stands at around Rs 440 crore.

IRB Infrastructure Developers Limited, Triton Valves Ltd., B2B Software Technologies Ltd. and R&B Denims Ltd. are set to disburse bonus shares to its stakeholders in the week ahead. To be eligible for a bonus issue, investors should pay attention to the record date, which is used to determine qualified shareholders.

The company announced this date in advance, and only those who hold the shares in their demat account as of this record date will be eligible for the bonus allotment. Under India’s T+1 settlement cycle, investors must purchase the shares at least one trading day before the record date to be eligible.

This means that purchases made on the record date itself will not reflected in the demat account in time. The board of IRB Infrastructure Developers Ltd. had recommended an issue of bonus shares in the ratio of 1:1 completely paid-up equity shares. This means that shareholders will receive one new completely paid-up equity shares for every existing share they hold, subject to shareholder approval. The record date for the same is set as April 2.

Similarly, the board of Triton Valves Ltd. had recommended an issue of bonus shares in the ratio of 3:1 new fully paid-up equity shares. This means that shareholders will receive three new fully paid-up equity shares for every existing share they hold, subject to shareholder approval. The record date for the same is set as April 1.

The board of B2B Software Technologies Ltd. had recommended an issue of bonus shares in the ratio of 1:2 completely paid-up equity shares. This means that shareholders will receive one new completely paid-up equity shares for every two existing shares they hold, subject to shareholder approval. The record date for the same is set as April 2.

The last company to announce bonus issue for the week is R&B Denims Limited.

It had recommended an issue of bonus shares in the ratio of 1:2 new completely paid-up equity shares. This means that shareholders will receive one new completely paid-up equity shares for every two existing shares they hold, subject to shareholder approval. The record date for the same is set as April 3.