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Reliance Industries Limited (RIL), India's largest company by market capitalization, has announced a bonus issue of shares in a 1:1 ratio. The company's board of directors approved the proposal, which will see existing shareholders receive one new share for every share they currently hold. This move follows the company's recent stock split, where the face value of the shares was reduced from Rs. 10 to Rs. 1. The bonus issue is expected to increase the number of outstanding shares in the market, thereby potentially lowering the share price in the short term.
Despite the announcement, RIL's shares closed over 1% lower on the day of the news. This decline could be attributed to various factors, including the broader market sentiment and investor concerns about the company's future growth prospects. However, some analysts believe that the bonus issue could be a positive development in the long run. They argue that it will enhance liquidity and make the shares more accessible to a wider range of investors, potentially driving demand for RIL's stock.
The bonus issue is scheduled to be implemented on a date to be determined by the company's board of directors. It is expected to take effect within the next few weeks or months. The exact timing will depend on regulatory approvals and other logistical arrangements. The company has not yet released any further details about the bonus issue, such as the record date for determining eligible shareholders. Investors are advised to stay updated on the company's official announcements for more information.
The news about the bonus issue has sparked interest among investors, with many speculating on its impact on RIL's share price. Some believe that it will lead to a surge in the stock, while others are cautious about potential short-term volatility. It remains to be seen how the bonus issue will ultimately play out in the market. The company's performance in the coming months and its ability to deliver on its growth plans will likely determine the long-term impact of the share split and bonus issue on RIL's stock price.
Source: RIL bonus issue: Board approves bonus issue in 1:1 ratio; shares down over 1%