Reliance Industries Limited (RIL), led by billionaire Mukesh Ambani, has officially announced the issuance of bonus shares in a 1:1 ratio, meaning shareholders will receive one additional share for every share they own. The board’s decision was confirmed through e-voting, and the record date for this significant corporate action has been set for October 28, 2024.
Details of the Bonus Issue
The announcement comes after the board approved the bonus issue during its 47th annual general meeting held in August 2024. This marks Reliance’s sixth bonus issue since its inception, with previous issues occurring in 1980, 1983, 1997, 2009, and 2017. The company has also decided to increase its authorized share capital from ₹15,000 crore to ₹50,000 crore, reflecting its growth strategy and commitment to enhancing shareholder value.In a regulatory filing on October 16, RIL stated, “We wish to inform that the company has fixed Monday, October 28, 2024, as the record date to determine the equity shareholders eligible for bonus equity shares.” This announcement follows a strong majority vote in favor of the resolutions related to the bonus issue and capital increase.
Financial Implications
The issuance of these bonus shares will be financed through the company’s securities premium account, general reserves, or retained earnings. Following this bonus issue, RIL’s paid-up capital is expected to double from ₹6,766.23 crore to approximately ₹13,532.46 crore, resulting in a total of 1,353.24 crore equity shares.The company estimates that around ₹6,766.23 crore will be required for this initiative, which is based on the paid-up capital as of the record date. This move is anticipated to improve liquidity in the stock market and make Reliance shares more accessible to retail investors.
Recent Performance and Future Outlook
In its latest quarterly results for Q2 FY25, Reliance reported a year-on-year decline in consolidated net profit by 3.6%, totaling ₹19,101 crore compared to ₹19,820 crore from the previous year. However, there was a sequential increase of 9.5% from Q1 FY25’s profit of ₹17,448 crore. The company’s revenue saw a slight rise of 0.8%, reaching ₹2,58,027 crore.Mukesh Ambani emphasized during the AGM that Reliance is committed to creating wealth for India and enhancing the quality of life for every Indian. The bonus share issue is seen as a testament to the company’s financial strength and its dedication to returning value to shareholders.
Conclusion
As Reliance Industries prepares for this significant corporate action with its upcoming bonus share issuance on October 28, shareholders are poised to benefit from increased equity holdings. This strategic move not only reflects Reliance’s robust growth trajectory but also reinforces its commitment to enhancing shareholder value.Disclaimer: This article is intended for informational purposes only and should not be considered as financial advice. Investors are encouraged to conduct their own research or consult with financial advisors before making investment decisions.
