Reliance Industries Board Greenlights 1:1 Bonus Share Issue, First in Seven Years

Reliance Industries announced on Thursday that its board has approved a 1:1 bonus share issue, marking the largest bonus equity issuance in India. This is the first such issuance by India's most valuable company in seven years. Additionally, the board recommended increasing the authorised share capital from Rs 15,000 crore to Rs 50,000 crore.

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Sixth Bonus Issue Since Listing

This marks the sixth bonus issue by Reliance Industries since its listing. The company had previously issued a 1:1 bonus in September 2017 when its share price was around Rs 700. On Thursday, the share price closed at Rs 2,987.15 on the BSE, down 1.41% from the previous day's close.

The board of directors stated, "The Board of Directors of Reliance Industries Limited (RIL) today approved the issue of bonus shares in the ratio of 1:1 i.e., every shareholder holding one fully paid-up equity share of Rs 10 each on the record date will receive one fully paid-up equity share of Rs 10 each." The record date for this issuance will be announced separately.

Historical Bonus Issues

Reliance's first bonus issue occurred in 1980-81 with a 3:5 ratio, followed by a 6:10 issue in 1983-84 and subsequent 1:1 issues in 1997-98, 2009-10, and 2017-18. This latest issuance is part of what the company calls its "Golden Decade" from 2017 to 2027, during which it aims to reward shareholders consistently.

In July 2023, Jio Financial Services Limited was demerged from Reliance and has since seen a valuation increase of 35% from its listing. This follows a Rights Issue in 2020 where shareholders' investments have grown by 2.5 times.

Commitment to Shareholders

Mukesh Ambani, Reliance's chairman and Asia's richest man, announced this bonus issue at the company's annual shareholder meeting last week. He emphasised that rewarding shareholders is integral to Reliance's growth strategy. "When Reliance grows, we reward our shareholders handsomely," he said on August 29. "And when our shareholders are rewarded handsomely, Reliance grows faster and creates more value."

During the annual general meeting, Ambani also mentioned that Reliance aims to more than double its size, with sales and profits doubling at its retail and telecom divisions.

This latest bonus issue underscores Reliance's ongoing commitment to rewarding its shareholders as part of its broader growth strategy during this decade.