Wipro Bonus Issue: One of the biggest bonus-paying stocks is Wipro Ltd. In early December, Wipro turned ex-date for its latest bonus issue in the ratio of 1:1, which is expected to be credited to shareholders' accounts by December 7, 2024. Adjusting to the bonus ratio, currently, the recommendation on the stock is HOLD, however, the target price is lower.
Wipro Share Price:
After the market hours of December 6, Wipro's stock price stood at Rs 297.25 apiece with a market cap of Rs 3,11,048.01 crore. The stock is near its 52-week high of Rs 300.85 apiece. Wipro's return on equity is about 15.13%.
Wipro Bonus Issue:
Wipro turned ex-bonus for its 1:1 ratio on December 3. If you are still holding the same shares till the ex-date of December 3, 2024, then these eligible shareholders will receive 1 free share on the existing 1 equity share in their portfolio.
At the latest, market regulator Sebi has decided to reduce the time taken for credit of bonus shares and trading of such shares, from the record date of the Bonus Issue. The settlement type for the bonus issue will be T+2. Simply put, you will be able to receive your bonus shares in the demat account in two days from the record date from the earlier timeframe of two weeks.
Sebi's new rule has come into effect from October 1, 2024, and most likely bonus shares from this date will be eligible for a 'T+2' settlement. Before that, bonus shares would take about 10-15 days to credit in the Demat account.
When Will Wipro's Bonus Shares Get Credited? As per ICICI Direct's latest note, shareholders holding Wipro Shares on the record date will receive one additional share for each share they own, effectively doubling their shareholding. The bonus shares are expected to be credited by December 07th, 2024.
How Does Wipro's Bonus Issue Impact Wipro Stock? ICICI Direct's note further explained that when bonus shares are issued by a company, the investment value of the stock remains unchanged. In case of bonus shares issued by Wipro Limited, additional shares will be credited to the customer's account tentatively by 07th December 2024. Until then, the portfolio will show a temporary drop in P&L. Once bonus shares are credited, the P&L will adjust to its correct value.
Until the bonus shares are credited, your investment might show a temporary 50% drop due to the price adjustment. Once credited, your portfolio will reflect the original investment value, the brokerage added.
Impact on the value of the portfolio? ICICI Direct further said that the total value of your investment in Wipro Limited will stay the same. After the bonus issue, the share price usually drops. However, since you own more shares, your overall investment value remains unchanged.
Wipro has been rewarding investors with bonus issues since 1971. The first bonus issue was in 1971, followed by 1:1 bonus shares rewarded six times in 1981, 1985, 1987, 1989,1992, and 1994. Later ahead, in 1997 and 2004, Wipro paid its second-highest bonus issue in history to the tune of 2:1 ratio. After that, the bonus issue was back to 1:1 in 2005. But it was in 2010, Wipro delivered its highest bonus of 2:3 ratio. Before Covid, Wipro paid 1:1 bonus shares in 2017 and 1:3 bonus shares in 2019.
BUY/SELL/HOLD Wipro:
As per Trendlyne data, the consensus recommendation from 41 analysts for Wipro Ltd. is HOLD. EPS is expected to grow by 12.3% in FY25.
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