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What are Bonus Shares?
Bonus shares are additional shares distributed by a company to its existing shareholders without any extra cost. It’s how companies like Fluidomat Ltd reward investor trust and boost market liquidity while maintaining confidence in their financial strength.
Bonus shares are issued from the reserves or retained earnings of Fluidomat Ltd and serve as a reward to investors while enhancing liquidity in the market. At Pocketful, tracking bonus shares and corporate actions of Fluidomat Ltd is seamless for the users.
Key Features of Bonus Shares
- No Additional Cost: Shareholders receive bonus shares free of cost.
- Proportional Allocation: Shares are distributed in a fixed ratio, such as 1:1, meaning one bonus share for every existing share.
- Capitalization of Reserves: The issuance of bonus shares utilizes the Fluidomat Ltd’s retained earnings instead of cash outflows.
- No Change in Ownership Percentage: The overall ownership structure of Fluidomat Ltd remains the same, but the number of shares held increases.
Key Dates Related to Bonus Shares
- Announcement Date: The date on which the Fluidomat Ltd declares its decision to issue bonus shares.
- Record Date: The cut-off date to determine eligible shareholders who will receive bonus shares from Fluidomat Ltd.
- Ex-Bonus Date: Shares purchased after this date will not qualify for the bonus issue.
- Allotment Date: The date when the bonus shares of Fluidomat Ltd are credited to eligible shareholders.
Example of Bonus Shares
Suppose Fluidomat Ltd announces a 1:1 bonus issue on January 1, 2024. The key dates are:
- Announcement Date: January 1, 2024
- Ex-Bonus Date: January 10, 2024
- Record Date: January 11, 2024
- Allotment Date: January 20, 2024
If an investor holds 100 shares of Fluidomat Ltd, he will receive an additional 100 bonus shares of Fluidomat Ltd, bringing the total holdings to 200 shares—all without spending any extra money.
Benefits of Bonus Shares
Issuing bonus shares isn’t just about rewarding investors—it’s a strategic move. For Fluidomat Ltd, it signals:
- Increased Liquidity: The number of shares in the market increases, improving liquidity.
- Encourages Investment: Signals financial health and attracts more investors.
- Lower Share Price: As shares are distributed, the share price adjusts downward, making it affordable for new investors of Fluidomat Ltd.
- Tax Benefits: Bonus shares are not taxed at the time of issuance.
How Can I Track Bonus Shares of Fluidomat Ltd on Pocketful?
Tracking bonus shares of Fluidomat Ltd is simple with Pocketful:
- Visit the Corporate Actions section of the Fluidomat Ltd.
- Select the Bonus Shares tab to check declared and historical records.
Tax Implications of Bonus Shares in India
- No Tax on Receipt: Bonus shares are tax-free at the time of issuance.
- Capital Gains Tax: Upon selling the shares, gains are taxed based on the holding period.
- Long-Term vs Short-Term Tax Rates as of December 2024:
- Long-Term (holding period > 1 year): 12.5% tax if gains exceed ₹1,25,000.
- Short-Term (holding period ≤ 1 year): 20% tax.
Conclusion
Bonus shares represent more than just free rewards—they symbolize growth, confidence, and long-term value. For investors of Fluidomat Ltd, it highlights the company’s ability to manage reserves effectively while encouraging participation from new and existing shareholders.
With Pocketful, tracking bonus issues of Fluidomat Ltd is as easy as click, analyze, and invest. Stay informed, stay ahead, and let your investments grow alongside companies like Fluidomat Ltd that prioritize investor rewards.
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