Wipro Bonus Issues: Shares of the IT giant were trading lower in the morning market session as they turned ex-date for 1:1 bonus issue on Tuesday.
The ex-date generally refers to the first day when a stock trades without the right to receive the bonus issue. If an investor purchases the stock on or after the ex-date, he/she will not be eligible for the bonus shares or dividend.
Last month, the company announced December 3 as the record date for Wipro bonus shares. The ex-date is usually set a few days before the record date, which is when the company identifies the shareholders who will receive the benefit.
At 10:25 am, the shares of the IT giant were trading at Rs 291, down by 0.43 per cent on the National Stock Exchange.
What does the 1:1 bonus issue mean for investors?
Under the 1:1 bonus share issue, investors holding one Wipro share will be eligible for an additional bonus share. This has eventually caused the stock to decline by nearly 50 per cent on the bourses as the price level adjusts for the new shares being issued.
When a company announces a bonus issue, it increases the total number of shares in circulation. As a result, the price per share generally drops. However, this fall is only temporary.
"...the Board of Directors has fixed Tuesday, December 3, 2024 as the Record Date for the purpose of determining the equity shareholders of the Company eligible for bonus equity shares (including Stock Dividend on ADS) of the Company," the company stated in an exchange filing dated November 21.
This will be Wipro's fourth bonus issue in the past 15 years. In 2019, the company announced a bonus issue in the ratio of 1:3, granting one bonus share for every three shares.
