What are bonus shares?

Bonus shares are additional shares given for free to the current shareholders of a stock. Bonus shares are issued in a pre-decided ratio and are allotted as per the number of shares held by the shareholders.

Example 1: If a company announces bonus shares in the ratio 1:2, this means that every shareholder will get one free share for every 2 shares held. 

So, if a user has 10 shares of a company and is eligible for receiving bonus shares then as per the 1:2 ratio the shareholder will get 5 free shares in their Demat account.

Example 2: If a company announces bonus shares in the ratio of 2:1 it means for every 1 share held of the company the shareholder will receive 2 shares.

Will I be eligible for a Bonus share?

The eligibility of any corporate action depends on the Record date and Ex-date of the scrip.

What is the Record date and Ex-date?

Record date: The record date is the cut-off date used to determine which shareholders of stock are entitled to a dividend. On this date, the company checks the list of all the shareholders who own stock of that company and therefore are eligible for the bonus issue.


Generally, a shareholder will have to buy the stock up to 2 working days before to have the stock in their name by T+2 days as per the current process from the exchange.


Ex-date: Ex-date is a trading day before the record date. From this date, the shares of the company start trading without reflecting the benefits of corporate actions such as bonus issues, which means that shareholders should purchase shares before the ex-date to become eligible for bonus shares. 


For example, if the ex-date is 3rd Dec then you can buy till  2nd Dec to be eligible for a Bonus. If you buy shares on 3rd Dec or after 3rd Dec then you will not be eligible to receive Bonus 

When will the Bonus Shares be credited?

If you are allotted bonus shares, it should take 15-20 days for the bonus shares to be credited to your Demat account from the record date.

 

Where can we check Bonus shares?

The bonus shares will get credited under a temporary ISIN and will not be allowed for trading purposes immediately but it will be reflected under the holding report as LST PEN which means listing pending (which is yet to be available for trading ie you can not sell those shares)as seen in the below image  

 

Mobile application screen whereby the bonus or unlisted shares can be checked in holding under-report tab

Please check the link to access the report How to check holding report

 

Web Screen whereby the bonus or unlisted shares can be checked in the holding under-report tab 

Account.upstox.com

 

How will I be intimated about the allotment of shares?

You will also receive notification on your registered mobile number & email address. Example below,