Introduction

In the stock market, companies give dividends or bonus shares to their shareholders as a reward for their continued support. Dividends are monetary benefits. But, if a company cannot disburse cash, they issue bonus shares.

Many investors perform meticulous research to adopt an investment strategy focused on bonus shares. It is because it allows you to enhance your portfolios without an additional investment. Bonus shares are commonly issued under the influence of the regulatory framework formulated by the Securities and Exchange Board of India (SEBI) and the company’s strategic financial management.

What are bonus shares?

Bonus shares are additional shares distributed to the company’s existing investors at zero cost. Their proportion is the same as the shareholder’s existing holdings. You are eligible for bonus shares if you hold the company’s shares on the record date of bonus shares.

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Bonus shares increase the number of shares you hold but don’t impact your overall ownership percentage in the company. Your proportional ownership stake remains the same. While their benefits can be reaped in the long term, you must understand the potential risks before incorporating them into your investment portfolio.

Bonus shares are also known as scrip issues, capitalisation issues, and bonus issues. This list highlights the bonus stocks expected to be issued in March 2024.

Upcoming bonus stocks in March 2024

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1. Paisalo Digital Ltd.​​​​​​​

Paisalo Digital Ltd. (NSE: PAISALO) announced the issuance of bonus shares on February 16, 2024. The ratio of distribution will be 1:1, which means existing shareholders will receive one bonus share for every one share they held originally. The company has set the record date for the issuance of bonus shares as March 20, 2024. As of March 1, 2024, Paisalo Digital Ltd.’s market capitalisation was Rs. 8,302 crore.

Paisalo Digital Ltd. is an India-based Non-Banking Financial Company (NBFC) offering finance solutions to the unbanked and underserved sections of the country’s population. The company uses technology to engage with its target market. Its product offerings include digital and scalable solutions that ease the process of lending and borrowing for individuals and small businesses who traditionally lack access to banking and financial services. The company’s business loans, small-ticket personal loans, and other financial services are tailored to the demands of the semi-urban and rural segments of the country.

2. Capri Global Capital Ltd.

Capri Global Capital Limited (NSE: CGCL) announced the issuance of bonus shares on February 23, 2024. The distribution ratio of the bonus shares will be 1:1. So, every shareholder having one share will get one bonus share from the company. The record date set for the issuance is March 5, 2024. The company’s market capitalisation as of March 1, 2024, was Rs. 20,421 crore.

Capri Global Capital Ltd. is an India-based Non-Banking Financial Company (NBFC). It is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and comes under the Nifty Small Cap 250 index. The company operates in two verticals, namely home loans and small and medium enterprises (MSME). It also serves as a corporate distributor for car loan products of six renowned commercial banks. Its financial services do not include insurance and pension funding activities.

Advantages of bonus shares for investors

Bonus shares are enticing for investors for several reasons.

• Portfolio enhancement

With bonus shares, the number of holdings in your portfolio increases, which diversifies and enhances your portfolio.

• Low cash outflow

Bonus shares are added to your portfolio at zero cost. So, there is little to zero cash outflow.

• Increased market value

While bonus shares make no difference to the proportionate ownership, the market value of your shares increases with their addition.

• Loyalty reward

Companies distribute bonus shares to express their gratitude to loyal and long-term shareholders.

Conclusion

Bonus shares are extra shares that investors receive for free against their current shareholding. Their allotment is usually in a fixed ratio like 1:1, 2:1, 3:1, and so on. You can receive bonus shares of the company only if you are its shareholder on the record date. These issues are different from dividends and involve no cash or monetary transfers. The issuance is on a pro-rata basis of the existing holding.

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