Reliance Industries Bonus Issue: The last date to be eligible for India's largest stock's upcoming bonus issue, which is for the first time in 7 years, is going to end on October 7, 2024. How? That is because the billionaire Mukesh Ambani-backed Reliance has extended the due date for investors who hold partly paid-up equity shares of the company, to turn them into fully paid-up shares to enjoy the benefit bonus rewards. So far, in its history of trading on exchanges, Reliance has awarded two bonus shares, and the upcoming one will be a third.
Reliance Industries Share Price:
Ahead of the record date, Reliance stock price stood at Rs 2773.80 apiece, on Friday last week, falling by 1.5%. The company's market cap stood at Rs 18,76,718.24 crore, making it the largest company in India.
However, Reliance had a bearish trading week from September 30 to October 4, with its weekly decline by 7.3% on BSE. Reliance's monthly drop is by 5.20%, while in six months, the stock has plunged by 6.6%.
But, year-to-date (January 1, 2024, t0 October 4, 2024), Reliance stock is still up by 7.10% on BSE.
Reliance Industries Bonus Issue:
Although October 7th is not a record date meant for investors who are already holding fully paid-up equity shares of Reliance, this date is important for those who have partly paid up. This is an extension from the earlier due date of September 30.
After approving for bonus issue in the latest AGM, Reliance on September 5th, announced the approval for forfeiture of partly paid-up equity shares on which call money (First Call or Second & Final Call or both) remains unpaid.
As per Reliance's regulatory filing, the forfeiture of the said partly paid-up equity shares will be effected in case the payment of call money along with interest. Thereby, failure to pay for the partly paid-up equity shares up to October 7, 2024, will lead to confiscation of the shares by the company.
If the shares are confiscated, then these investors will not be eligible to enjoy the rewards of --- - Bonus shares in the ratio of 1:1; - Equity shares of Jio Financial Services Limited which are currently lying with JFSL Trust - PPS (RIL).
How do you make the payment? As per RIL's statement, the payment of the call money can be made by any one of the following modes:
- demand draft to be sent to KFin Technologies (Unit: Reliance Industries Limited), Hyderabad, along with duly filled up Payment Slip and Notice of Forfeiture.
Reliance's bonus issue is the largest-ever issuance of bonus equity shares in the Indian equity market. RIL is planning to reward bonus shares as an early Diwali gift.
The record date to be eligible for Reliance's bonus issue on fully paid-up shares is yet to be announced. But Reliance is expected to reward 1 free bonus share on the existing 1 equity share.
If we take the past two bonus shares, and the upcoming one, investors win big on their portfolio.
For Example: Let an investor hold 500 shares of Reliance by the end of November 26, 2009, which was when Reliance turned ex-date for its first-ever bonus issue that was also in the ratio of 1:1.
Then these 500 shares, will receive 500 bonus shares (500X1), taking the total portfolio number to 1,000 shares in Reliance.
And if the 1000 shares of Reliance were held by September 7, 2017, the second record date for the bonus issue which was also in 1:1, then the number of shares multiply further. 1,000 shares will receive 1,000 bonus shares (1,000x), taking the total number of shares to 2,000 shares in Reliance.
Additionally, if the investor continues to hold 2,000 shares by the end of the upcoming bonus issue record date, then they will receive 2,000 bonus shares, taking the total number of shares to 4,000 shares.
It needs to be noted that the bonus issue ratio also adjusts the price value of listed stocks, hence, Reliance stock which has not carried any stock split yet, has undergone various adjustments.
BUY/SELL Reliance Stock:
CLSA has recommended BUY on Reliance. The global broker has set Rs 3,300 target price, hinting at a potential 13% upside ahead. CLSA predicts Reliance's PE ratio at 27.1% by the end of FY25 and at 23.3x by FY26, while the PB ratio is seen at 2.3x by FY25 and 2.1x by FY26. The return on equity is seen at 8.8% in FY25-end and 9.5% in FY26.
Meanwhile, brokerage Kotak Institutional Equities has suggested ADD with a target price of Rs 3,200. Further, Antique Stock Broking has suggested HOLD on RIL for a target price of Rs 3,194. Notably, Morgan Stanley has maintained Overweight on Reliance, with a target price of Rs 3,416. The outlook is positive. The highest target price on Reliance is set by BOB Capital Markets at Rs 3,585 with a BUY recommendation.
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