Reliance Industries Limited: The board of directors of Reliance Industries Limited (RIL), a company led by India's leading business tycoon Mukesh Ambani, on Thursday approved the issuance of one bonus share for one share (bonus shares in 1:1 ratio). This is the sixth bonus issue given by the most valuable company of Dalal Street based in Mumbai. This is the first time in seven years that the company will give bonus shares. The company said that the record date information for issuing bonus shares will be given separately. Reliance, the country's most valuable company in terms of market capitalization, had earlier issued bonus shares in September 2017. In a notice given to the stock market, the company said that its board of directors has recommended that shareholders to approve the issuance of bonus shares in a 1:1 ratio.

A new equity share of Rs 10 will be issued on one share

That is, a new equity share of a face value of Rs 10 will be issued for every existing share. The record date for issuing bonus shares will be informed separately. Before issuing 1:1 bonus shares in 2017, Reliance had issued 1:1 bonus shares in 2009. The board of directors has also sought approval from shareholders to increase the authorized share capital of the company from Rs 15,000 crore to Rs 50,000 crore. Let us tell you that a bonus is issued by a company only to existing shareholders. It reduces the free reserves and surplus of the company but increases the number of outstanding equity shares.

The last bonus share came in 2017

Corporate action leads to a decline in profit-per-share ratios such as EPS and book value per share. As a result, it reduces the share price in proportion to the number of bonus shares issued. Reliance Industries said its board of directors has recommended the same to shareholders for their approval through a postal ballot. RIL's last bonus issue came in calendar 2017, since then the stock has surged 318 percent to hit a high of Rs 725.65 on September 7, 2017, and touched Rs 3,015 on Wednesday. Reliance Industries had announced the same bonus share ratio for its 2009 issue. The stock was ex-dated on November 26 of that year.