Introduction:

Issuing bonus shares is a common practice by companies listed on the Indian stock exchanges. Bonus shares refer to a corporate action wherein the shareholders receive additional shares in a fixed proportion at no extra cost. Bonus shares also help existing shareholders augment their ownership stake in the company without making fresh investments.

The issuance of bonus shares can potentially boost trading volumes for the stock. It often reflects a company's robust financial standing and optimism about future opportunities, potentially drawing in fresh investors.

List of upcoming bonus shares in April 2024

Two companies have already announced the issuance of bonus shares in April 2024. Investing in these companies before the record date can help you receive additional shares at no extra cost. Keep reading to know in detail about the upcoming bonus shares in April 2024:

• Sunrise Efficient Marketing Limited

Incorporated in 2002, Sunrise Efficient Marketing Limited (SEML) holds the prestigious ISO 9001:2015 certification. SEML operates across a diverse spectrum of roles, serving as traders, distributors, super stockists, wholesalers, retailers, importers, agents, exporters, dealers, buyers, sellers, fabricators, assemblers, fitters, installers, and repairers for a comprehensive range of products. The company’s product portfolio comprises industrial machinery and spare parts, construction and engineering supplies, oils, lubricants, fast-moving consumer goods (FMCG), and supply chain management.

On 27 February 2024, the company’s Board announced the issuance of bonus shares for its shareholders in the ratio of 1:2. It means the shareholders will receive one bonus share for every two shares they hold by the record date. The company has fixed the record date for this corporate action as 3 April 2024.

As of 30 March 2024, Sunsrise Efficient Marketing Limited’s shares were trading for Rs. 101.65 per share at the Bombay Stock Exchange (BSE). The company had an impressive ROE (Return on Equity) of 27.68%. The P/E ratio stood at 12.22.

• Cupid Limited

Cupid Limited is a leading condom manufacturing company in India. The company is also engaged in packaging and distributing other sexual wellness products, including male and female condoms, water-based lubricants, and vitro-diagnostic kits. The company has a manufacturing facility at Sinnar near Nashik in Maharashtra.

On 22 March 2024, the company’s Board of Directors announced the issuance of bonus shares for the shareholders in a ratio of 1:1. It means that the shareholders will receive one bonus share for every share they hold by the record date. The record date has been fixed as 4 April 2024.

As of 30 March 2024, Cupid Limited shares were trading for Rs. 2,353.85 per share at the NSE and Rs. 2,356.95 per share at the BSE. The company’s market cap stood at Rs. 3,172 crores. The ROE stood at 14.98%. The P/E ratio stood at 127.79.

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Why invest in bonus shares?

If you are thinking about why should you invest in these upcoming bonus shares in April 2024, below are the reasons to do so:

• Augment your ownership stake in a company without extra investment

You can acquire supplementary shares by investing in the upcoming bonus shares in April 2024. It helps you amplify your ownership stake in the company without making additional investments.

• Potential short-term returns

The issuance of bonus shares is a clear indicator of the company's confidence in its prospects. This optimistic stance can bolster investors' perception of the company's value, thus potentially increasing its attractiveness. By investing in such shares, you can gain high short-term returns.

• High liquidity

The issuance of bonus shares increases the number of outstanding shares of a company, thereby contributing to higher liquidity. As an investor, you can leverage the increased liquidity in a share to enter and exit your position swiftly.

• Tax benefits

Capital gains and dividends are taxable in the hands of investors. However, when you receive bonus shares as a reward, you won’t incur any tax liability.

• High dividend income

Investing in bonus shares helps you receive extra shares for free. These shares, in turn, help you get a high dividend income when the company decides to distribute dividends to its shareholders.

To conclude

Investing in the upcoming bonus shares in April 2024 is replete with benefits. However, you must conduct thorough research, stay aware of the market updates, and consider your risk appetite before making investment decisions.

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