Reliance Bonus Shares Explained: 2024 Update, History, Key Dates & Impact on Investors

Companies often reward shareholders without distributing cash. This is achieved by issuing bonus shares, which are free additional shares based on existing holdings. This method is common when a company has substantial accumulated profits.

Bonus shares are funded by capitalising a company's retained earnings. These are profits not paid out as dividends. This process aligns the company's issued capital with its employed capital. It can also manage high dividend rates or provide an alternative to cash dividends.

Table of Contents

1. Understanding Reliance Industries
2. Reliance's Latest Bonus Issue (2024)
3. Eligibility and Key Dates for Bonus Shares
4. Impact of Bonus Shares on Your Investments
5. Reliance's Bonus Share History
6. SEBI's New T+2 Rule: Faster Bonus Share Trading
7. Conclusion: Maximising Your Reliance Investment
8. Troubleshooting: If You Don't Receive Your Bonus Shares
9. Frequently Asked Questions (FAQs)

Understanding Reliance Industries

Reliance Industries (RIL) is a leading Indian conglomerate. It is one of India's largest private-sector corporations and a Fortune 500 company. RIL operates across diverse sectors with over 75 distinct brands.

Key business areas include petrochemicals, oil refining, and oil and gas exploration. Additionally, Reliance has a strong presence in consumer businesses like retail and digital services. Its integrated model and global competitiveness highlight its significant market position in India.

Reliance's Latest Bonus Issue (2024)

Reliance Industries recently announced a notable bonus issue. This move has drawn significant attention from the investment community.

On 16 October 2024, shareholders overwhelmingly approved a 1:1 bonus share issue. A remarkable 99.92% of votes were in favour. This issue represents the largest bonus equity share issuance in the Indian equity market to date.

A 1:1 bonus ratio means one new, fully paid-up equity share (Rs 10 face value) for every existing share held. For example, 1,000 RIL shares would become 2,000 shares. This doubles shareholder holdings at no extra cost.

Source of Funds for Bonus Shares

Bonus shares are issued by capitalising funds. These come from the company's securities premium account, general reserves, or retained earnings as of 31 March 2024. Before this issue, Reliance's paid-up capital was Rs 67.7 billion.

Eligibility and Key Dates for Bonus Shares

To qualify for bonus shares, investors must hold shares by a specific cutoff date. This is crucial for determining eligibility.

The Record Date and Ex-Date

Reliance Industries set Monday, 28 October 2024, as the record date for determining eligible shareholders. Only those shareholders registered by the close of business on this date are entitled to bonus shares.

The ex-bonus date (or ex-date) typically precedes the record date by one or two working days. This depends on the stock exchange's settlement cycle (T+1 or T+2). For Reliance, its shares turned ex-bonus on 28 October 2024, aligning with the record date.

Therefore, retail investors needed to purchase Reliance shares before the market closed on Friday, 25 October 2024, to be eligible. Shares bought on or after the ex-date trade without the right to receive the bonus issue.

When to Expect Your Bonus Shares

Bonus shares are generally credited to your demat account approximately 15 days after the record date. However, this timeline can vary. It depends on the company's Registrar and Share Transfer Agent (RTA).

Initially, you might see a temporary drop in your investment value and P&L on trading platforms. Once the bonus shares are credited, your investment value and P&L will automatically update to reflect the adjusted holdings.

Impact of Bonus Shares on Your Investments

Bonus issues have several important implications. They affect both the issuing company and the shareholder's investment portfolio.

Share Price Adjustment

A bonus issue increases your share count, but your total investment value typically remains unchanged immediately. This is because the company's market capitalisation does not change. Instead, the share price decreases proportionally to the increased number of shares.

For example, a 1:1 bonus issue (doubling shares) usually halves the share price. If you own 100 shares at ₹50 each (total ₹5,000), you would hold 200 shares. The price would adjust to ₹25 per share, maintaining your total value at ₹5,000. This price adjustment is not a stock correction.

Key Impacts of Bonus Shares

Long-term Value and Liquidity

Over time, bonus shares can potentially enhance portfolio value, especially with continued company performance and stock appreciation. A bonus issue often signals financial strength and future confidence. This positive perception can attract investor interest, potentially boosting the stock price.

Furthermore, bonus issues significantly improve a stock's liquidity in the market. By increasing outstanding shares and lowering the per-share price, the stock becomes more accessible and affordable to a broader base of investors. This enhanced liquidity leads to greater market activity and a more dynamic trading environment.

Reliance's Bonus Share History

The 2024 bonus issue marks Reliance Industries' sixth such event. This highlights its consistent commitment to returning value to shareholders.

Here's a detailed look at Reliance's bonus issue history:

Since its last bonus issue in 2017, RIL's stock has shown impressive growth. It delivered a return of nearly 270%. For a long-term investor holding 1,000 shares since 1983, their holding would have multiplied to 25,600 shares after the 2024 bonus issue. This demonstrates significant long-term wealth creation.

SEBI's New T+2 Rule: Faster Bonus Share Trading

The Securities and Exchange Board of India (SEBI) introduced a new initiative for bonus shares, effective 1 October 2024. This aims to streamline the trading process and benefit investors.

Previously, bonus shares took around 4-5 trading days to become available for trading. With SEBI's new regulation, bonus shares are now available for trading within two trading sessions (T+2 timeline) after issuance. This significantly expedites the process.

Benefits of SEBI's New T+2 Rule:

To facilitate this, companies must seek in-principle approval from the stock exchange within 5 working days of the board's decision. They must also notify the stock exchange of the record date and estimated allocation date on a T+1 basis. Necessary documents must be submitted to the depository by 12 pm the next working day for database updates.

Conclusion: Maximising Your Reliance Investment

Reliance Industries' bonus issues, especially the recent 1:1 issuance, reflect its robust financial position. They demonstrate a commitment to rewarding shareholders. While bonus shares do not immediately change total investment value, they increase share count and enhance liquidity.

Understanding bonus share mechanics is crucial for informed decisions. This includes their impact on share price, dividends, and tax implications. The recent SEBI T+2 rule further improves the efficiency and investor experience, making the process faster and more transparent.

Troubleshooting: If You Don't Receive Your Bonus Shares

If you are an eligible shareholder and do not receive your bonus shares within the expected timeframe (approximately 15 days from the record date), immediate action is advised.

Firstly, contact the company's Registrar and Share Transfer Agent (RTA) and the company directly. Contact details for the RTA and investor complaints are usually found in the Investor Relations section of the company's official website.

If the RTA does not provide a satisfactory resolution, you can escalate your complaint to the Securities and Exchange Board of India (SEBI). This can be done via the SEBI SCORES website (https://scores.gov.in/) or its mobile application (Android/iOS). Provide your name, PAN, address, mobile number, and email ID for an effective and speedy grievance redressal.

Frequently Asked Questions (FAQs)

Q1: What are bonus shares?

Bonus shares are additional shares issued to existing shareholders at no extra cost. They are typically funded from accumulated company profits.

Q2: How do bonus shares affect my investment?

They increase your share count. However, the total investment value usually remains unchanged initially due to proportional share price adjustments. Your ownership percentage generally stays the same.

Q3: Are bonus shares taxable?

Generally, bonus shares are not immediately taxable upon issuance. However, any profit realised from their sale later may be subject to capital gains tax.

Q4: What was Reliance Industries' latest bonus issue ratio and record date?

Reliance Industries' latest bonus issue in 2024 was a 1:1 ratio. The record date was Monday, 28 October 2024.

Q5: How does SEBI's new T+2 rule impact bonus shares?

Effective 1 October 2024, this rule means bonus shares are available for trading within two trading sessions after issuance. This significantly speeds up the process and improves market liquidity. For more details, refer to the SEBI Circular on Bonus Issues.

Q6: What should I do if my bonus shares are not received?

First, contact the company's Registrar and Share Transfer Agent (RTA). If the issue remains unresolved, file a complaint with SEBI via their SCORES platform: SEBI SCORES.

Disclaimer: This article is for informational and educational purposes only and should not be considered financial advice. Stock market investments are subject to market risks. Please conduct your own thorough research or consult with a qualified financial advisor before making any investment decisions. The financial data and market figures mentioned are based on information available up to early June 2025 and can change.