Bonus, Stock Split Alert: Agrochemical company board meets today for free share issue

Shares of Bharat Rasayan Ltd. are trading in the green on Friday, October 24, ahead of the company’s board meeting to consider a proposal for a stock split and bonus issue of shares.The chemical manufacturing company is also scheduled to announce its September quarter results on the same day, apart from the proposed corporate actions.

The record date for the stock split and bonus issue is yet to be determined.

This will be the first instance that Bharat Rasayan will be considering a bonus issue and a stock split for its shareholders.Companies generally carry out a stock split to make it easier for shareholders to buy or sell their shares, as it increases the liquidity in the stock. A stock split divides a company’s stock into more shares, lowering the price and increasing the number of shares available to trade.

The companies also issue bonus shares to capitalise on their free reserves, increase their Earnings Per Share (EPS) and paid-up capital, along with reducing the reserves. Shareholders are issued these shares at no additional cost and hence are also known as free shares.

Only those investors will be eligible for bonus shares who will buy the stock before the ex-date. If an investor purchases the shares on the ex-date or after that, they will not be eligible to get bonus shares.

Shares of Bharat Rasayan Ltd. ended 8.84% higher at ₹11,655.95 on Thursday. The stock has surged nearly 23 in the last five trading sessions%.