Bonus Issue: Media Stock Hits 5% Upper Circuit As It Plans To Declare Bonus Shares On October 28; Do You Own?

Film production, distrubution and exhibition company, Pooja Entertainment And Films share price locked at 5% upper circuit on Wednesday after the company announced its proposal to issue bonus shares. A board meeting is scheduled on October 28, when the proposal will be considered.

On BSE, at the time of writing, Pooja Ent's stock price stood at Rs 218.45 apiece, which is its 5% upper circuit. The stock is currently up by 46% from its 52-week low of Rs 149.40 apiece on the exchange.

Meanwhile, the stock's 52-week high is at Rs 289.95 apiece.

The stock is listed only on Bombay Stock Exchange (BSE).

As per the regulatory filing on October 23rd, the board of directors of Pooja Ent wll be meeting on Saturday, October 28, 2023 to consider issuance of bonus shares subject to approval by the shareholders of the Company.

Pooja Entertainment is one of India's largest film production and distribution companies which is operating since 1995.

In general terms, bonus shares are issued in a certain proportion only to the existing shareholders free of cost. Under this corporate action, new shares are issued at the existing Face Value of equity shares of the company. Hence, the face value remains the same post-bonus issue.

Brokerage Nirmal Bang explains the advantages of bonus shares on both investors and companies in general term.

For investors:

As per the blog of Nirmal Bang, here's how investors will benefit from bonus share:

- Investors do not have to pay any tax while receiving bonus shares from the company.

- Bonus shares are considered beneficial for long-term shareholders of the company looking to multiply their investment.

- Bonus shares are free of cost to shareholders as they are issued by the company, which increases the outstanding shares of an investor in the company and enhances the liquidity of the stock.

- Bonus shares help build the trust of an investor in the company's business and operations because they have invested in the company and, in turn, gives capital to the investor.

From Company's Point of View, as the brokerage, the advantages are:

- The issue of bonus shares enhances the company's value and increases positions and image in the market, gaining the trust of existing shareholders and attracting several small investors to be a part of the stock market.

- The companies have more free-floating shares with the issue of bonus shares in the market.

- Issue of Bonus shares benefits companies to get themselves out of the situation where they are not able to or simply not prefer to pay cash dividends to their shareholders.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.