The two big firms that offered bonus issues this year were Reliance Industries (1:1) and Indian Oil (1:1). It is possible, say analysts, that companies were hesitant to issue bonus shares in an uncertain environment since they were not sure they would be able to service the expanded equity by payign an adequate dividend. Companies prefer to be confident about the future profitability of the business before they declarea bonus. Bonuses have always made small investors happy, though there is no actual value addition to the companys balance sheet or the stock price. The investor, stands to gain if dividends are paid since these are a percentage of the shares face value.
Some companies have been liberal with their bonus issues. Jindal Steel, for instance, gave shareholders five bonus shares for every share held.
Among the industries, IT, construction, NBFCs, pharmaceuticals and trading declared maximum number bonus during 2009. Among the construction companies, JP Associates declared 1:2 bonus in the month of September 2009. The net worth of the company increased by 47.9% to Rs 6,347 crore during 2008-09. The net profit of the company also increased by 47.3% during the above period.
Twenty one companies have issued 1:1 bonus issues during 2009. And five companies issued bonus 1:2 during the same period. Among others, highest number of bonus shares issued by Munoth Capital (7:2) followed by Hiran Orgochem (4:1).
In 2008, 26 companies have issued 1: 1 bonus shares. And 9 companies have issued 1:2 bonus issues. Among others, highest number of bonus shares issued by Westlife Develop (79:1) & Veer Energy (14:10). In 2009, there were one bonus announcements each in January, February, March, four announcements in June, eight companies announced bonus during the month of July., seven announced bonus in August., nine announced bonus in September., three announced in October, two announced in November., eight announced in December. So the highest number of companies declared bonuses in the month of September 2009.
Jindal Steel and Hiran Orgachem are the majors which declared bonus in September.