09-11-2021, 04:54 PM
Bonus shares can be issued by a company, whenever they wish to. It's a free share given to existing shareholders of the company. When a company announces that they're providing a bonus share, they mention a ratio of how many shares they will issue. For example, if the ratio provided is 1:3, a company will provide 1 share for every 3 shares held by the shareholders. They also announce a record date and issue date. The record date is the date before which the shareholders should be in possession of the shares, and the issue date is when those bonus shares will be issued or reflected in your Demat account. Bonus shares are issued by companies in place of dividends as a reward for shareholders.