Bajaj Finance Ltd. is set to reward its shareholders with a massive windfall, turning 10 shares into 100, as the company rolls out a combination of a stock split and bonus issue. The upcoming corporate actions, coupled with a generous dividend payout, have put the non-banking financial company in sharp investor focus.
Key Dates To Watch
The record date for the stock split and bonus shares has been fixed for June 16, which means only those shareholders who hold Bajaj Finance shares by June 13 will be eligible. The company had set May 30, as the record date for its final dividend of Rs 44 per share.
What's Changing?
Bajaj Finance's board has approved two significant corporate actions:
Stock Split: Each equity share of face value Rs 2 will be split into two shares of Rs 1 each. This move is aimed at improving liquidity and making the stock more accessible to retail investors.
Bonus Issue: In addition, the company will issue four bonus shares for every one share held (4:1). These bonus shares will be of Rs 1 face value, in line with the new split value.
Shareholder Math: From 10 To 100
Here's how it works for an investor holding 10 shares:
1. Stock Split: 10 shares of Rs 2 face value become 20 shares of Rs 1 each.
2. Bonus Issue: For every one share, four bonus shares are issued. So for 20 shares, the investor receives 80 bonus shares.
3. Final Tally: The shareholder ends up with 20 (post-split) + 80 (bonus) = 100 shares.
What This Means For Investors
While the corporate actions do not impact the overall value of a shareholder's holding immediately (as the share price adjusts proportionately), the increased number of shares in circulation can improve liquidity and trading volumes. Combined with the Rs 44 dividend per share, Bajaj Finance is demonstrating strong shareholder returns and confidence in its future earnings growth.
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