Free rewards are just around the corner to lift public and non-public shareholders portfolios, thanks to the massive bonuses reward that the Indian Stock Exchange NSE has announced. 4 Bonus shares for free will be distributed among investors to hold 1 existing share of NSE. Also, NSE will reward a whopping Rs 90 per share dividend. However, not everyone will be eligible to receive these bonus shares as NSE is not a publicly listed company like its counterpart BSE Ltd. As of March 31, 2024, the non-public shareholding in NSE is to the tune of 43.80%, and the public holding is about 56.20%. Among these, there are four PSUs and the largest retail chain company's owner Radhakishan Damani who is also among ace investors in the stock market.
NSE Bonus Shares:
The board of NSE has recommended issuing 4 bonus shares for the existing 1 share held, subject to necessary approvals from shareholders and regulators for an increase in authorized share capital. Accordingly, the bonus issue ratio is at 4:1.
Bonus shares are free of cost given by listed companies to their existing shareholders from their profitability of respective financial years. In bonus issues, new equity shares are issued by the companies on existing shares in a specific ratio, however, face value remains the same post-bonus.
NSE Dividend:
Apart from bonus shares, NSE has also recommended a dividend of Rs 90 per share (pre-bonus) for the year ending FY 24 amounting to a pay-out of Rs.4,455 crore.
Dividends are paid to those eligible shareholders who hold the dividend-paying stock at the specified date. They are distributed as incentives by the companies from their profitability for respective financial years. But notably, dividends vary into three categories, interim, special, and final.
Who Are Eligible?
As per NSE, as of March 31, 2024, the Non-Public Shareholding is at 43.80% in the exchange against the prescribed limit of 49% and the public holding is 56.20% against the minimum prescribed limit of 51%. Therefore 25,743,259 shares are available for acquisition of shares from Public to Non-Public Shareholders. The number of shares available for person resident outside India is 61,695,254 (12.46%)
Further, the shareholding pattern released by NSE for Q4FY24 revealed that there were five PSUs that would benefit from NSE rewards. 3 of them are listed. Among others is also Radhakishan Damani who is the founder of DMART retail chain.
As of March 31, 2024, General Insurance Corporation of India holds 81,40,000 equity shares or 1.64% in NSE, while The New India Assurance Company Limited holds 70,40,000 equity shares or 1.42% stake, and National Insurance Company Limited also holds 70,40,000 equity shares or 1.42%. Lastly, The Oriental Insurance Company Limited another PSU holds 70,40,000 equity shares or 1.42%.
Furthermore, the last PSU is the largest public sector lender State Bank of India (SBI) which holds 1,59,69,410 equity shares or 3.23%. Also, SBI holds a stake in NSE through its brokerage subsidiary SBI Capital Markets which has 2,14,50,000 equity shares or a 4.33% stake.
Then there is Radhakishan Damani, one of the ace investors on the stock market, who holds 78,16,880 equity shares or 1.58% stake in NSE.
Other shareholders also hold a piece of NSE, however, their shareholding is less than 1%. These are, Barclays, SBI Life Insurance, HDFC Bank, ICICI Bank, ICICI Lombard General Insurance, and HDFC Bank Life Insurance.
NSE Earnings:
The leading exchange has reported consolidated revenue from operations at Rs.4,625 crores for Q4 FY24, up by 34% on a year-on-year basis. Apart from trading revenue, the revenue from operations was also supported by other revenue lines which mainly include data center & connectivity charges, clearing services, listing services, index services, and data services. Further, NSE posted a net profit of Rs.2,488 crores on a consolidated basis for Q4 FY24, up by 20% on a year-on-year basis. The net profit margins for Q4 FY24 stood at 49%.
On a consolidated basis, earnings per share increased to Rs.50.25 in Q4 FY24 from Rs.41.72 in Q4 FY23. Meanwhile, on the trading volumes front, cash markets recorded an average daily traded volumes (ADTVs) of Rs.1,11,687 crores (up 127% YoY) while the equity futures reached an ADTV of Rs.1,79,840 crores (up 60% YoY) and equity options (premium value) ADTVs stood at Rs.75,572 crores (up 27% YoY) for Q4 FY24.
About NSE:
The National Stock Exchange of India (NSE) is the world's largest derivatives exchange by trading volume (contracts) as per the statistics maintained by the Futures Industry Association (FIA) for the calendar year 2023. NSE is ranked 3rd in the world in cash equities by number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for calendar year 2023.
NSE was the first exchange in India to implement electronic or screen-based trading. It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on SEBI data.
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