FMCG giant Nestle India, which is also the maker of the popular noodles brand Maggi, will announce its first-ever bonus issue on June 26. Accordingly, Nestle's stock price will be in focus ahead. YTD, Nestle stock has outperformed benchmarks Sensex and Nifty, with an upside of over 11%. Nestle's all-time gains are mind-boggling by 10,751.58%.
Nestle India Share Price:
Ahead of its bonus issue meeting, Nestle's stock price witnessed sharp buying sentiment on June 25. The stock rallied by nearly 2% to close at Rs 2,409.05 apiece on BSE, which was near its intraday high of Rs 2,429 apiece. The market cap of Nestle India is nearly Rs 2.32 lakh crore. It has a strong return on equity of 83.06%.
Nestle India Bonus Issue:
In its regulatory filing, Nestle said, "This is to inform you that a meeting of the Board of Directors of the Company is scheduled to be held on Thursday, 26th June 2025, to inter-alia consider and approve the proposal for issue of bonus shares, subject to requisite approvals."
This will be the first bonus issue of Nestle. This also comes after Nestle carried its first stock sub-division in January 2024, in the ratio of 1:10.
If Nestle announces a bonus issue, its stock price will be adjusted accordingly. Since its stock split, Nestle has delivered a total of Rs 42.5 dividend to its investors.
In 2025 alone, the company announced a Rs 24.25 dividend per share. Of this total, Nestle is yet to turn ex-dividend for a dividend of Rs 10 per share whose record date is fixed on July 4, 2025.
Why Do Companies Issue Bonus Shares?
Companies issue bonus shares to encourage retail participation and increase their equity base. When the price per share of a company is high, it becomes difficult for new investors to buy shares of that particular company. An increase in the number of shares reduces the price per share. But the overall capital remains the same even after bonus shares are declared, as per Kotak Securities blog.
Here are the advantages of bonus shares for investors, as per Nirmal Bang:
1) Investors do not have to pay any tax while receiving bonus shares from the company.
2) Bonus shares are considered beneficial for long-term shareholders of the company looking to multiply their investment.
3) 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.
4) 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, give capital to the investor.
BUY/SELL Nestle Stock?
As per the Trendlyne data, the consensus recommendation from 36 analysts for Nestle India Ltd. is HOLD. EPS is expected to grow by 17.4% in FY25. The average target price is set at Rs 2426.27 apiece. Nestle is currently nearing this target price.
About Nestle India Ltd:
NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland. With nine manufacturing facilities, large number of co-packers, and a strong distribution network, Nestlé India provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction.
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.
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