ITC Bonus History

ITC bonus history

ITC(India Tobacco Company Limited) is an Indian conglomerate company that was founded on 24 August 1910. ITC headquarter is in Virginia House, Kolkata, West Bengal, India.

ITC’s key products include Consumer goods, Apparel, Education, Hotels and Resorts, Paperboards & Specialty Papers, Packaging, Agribusiness, Information technology, Cigarettes.

Share Bonus is a new stock market technique companies use to attract further new and hold old shareholders. Rather than cashing out the employees in the form of dividends, the money creates more value. 

The new bonus stock drives the individual share price down, bringing in retail investors and increasing stock liquidity, activity. The established shareholders are incentivized while not having to dilute their portfolios.

Share Bonus Share drives a higher market capitalization to help companies raise more money from the market.

ITC Share Bonus History

Announcement Date Bonus Ratio Record Date Ex-Bonus Date
May 20, 2016 1:2 July 4, 2016 July 1, 2016
June 18, 2010 1:1 August 4, 2010 August 3, 2010
June 17, 2005 1:2 September 28, 2005 September 21, 2005
July 12, 1994 1:1 October 6, 1994 September 12, 1994
September 30, 1991 3:5 January 15, 1992 December 12, 1991
April 29, 1989 1:1 August 31, 1989
April 29, 1980 1:5

ITC has announced bonuses 7 times from 1980 to now. The last time ITC announces a bonus was on May 20, 2016, with a bonus ratio of 1:2, The record date is July 4, 2016, with an ex-bonus date of July 1, 2016.

What is a Bonus Share?

Bonus shares are free shares given out to the shareholders based on their current shareholdings. In this scenario, all the profits are converted into free shares instead of being given out as a dividend. The shareholders then can hold or float these shares in the market freely.

How Does a Bonus Share work?

The Bonus shares are given to the shareholders based on their holdings and do not dilute their portfolio. The amount of bonus shares issued depends upon the company; for ex-, If a company offers 4/3 bonus shares, it will be multiplied by the shares owned, and the company will issue bonus shares accordingly.

Is Bonus Share Good for the Investors?

Yes, there are many benefits of Bonus Shares for the investors-

  1. Increase in Market Capitalisation- Profits generated getting converted into additional shares can increase the market value for companies.
  2. Reduced share prices- Increase in the share will lead to the stock’s market value going down. It can bring in new value to investors and retailers to buy the stock, increasing stock activity.
  3. No dilution- The lack of dilution is hugely beneficial for the shareholders and increases their portfolio value.

What Happens When Bonus Shares are Issued?

The liquidity of the stock increases, and the share prices tend to fall due to more stocks available in the market. It can boost a stock’s performance and bring new retail investors to invest in a company.

Do Share Prices Fall After Bonus Issues?

Yes, the share prices fall due to the basic market economics and supply/demand trends that influence the stocks.  

Who is Eligible for Bonus Shares?

The shareholders who bought shares before the ex-date are eligible for receiving bonus shares.

What is the Bonus Announcement Date?

It is the date set by the corporation’s management when a company will issue the bonus shares to the shareholders.

What is a Bonus Ratio?

It refers to the issue of bonus shares compared to the total amount of shares an individual or corporation holds. Bonus Ration is the basic mathematical equation used to determine the new shares issued.

What is a Bonus Record Date?

The bonus Record date is the day the management and the shareholders agreed as the cut-off date for new shareholders.

What is an Ex Bonus Date?

It is the day preceding the record day set by the company’s management, shareholders.