Bonus Share Update: Nestle India has informed the NSE and BSE that the company's board has recommended the issuance of bonus equity shares in a 1:1 ratio. This decision was made during a recent board meeting, where the objective of further strengthening the company's capital structure was discussed.
Nestle India, a giant in the FMCG sector, made a major announcement for its investors on Thursday. The company has declared bonus shares to shareholders in a 1:1 ratio. That is, those who have one share will get one additional share. Following this news, the company's shares saw a surge in the market, and investors' confidence strengthened.
This information was made public after the company's board meeting on June 26th. The meeting reviewed the financial results of the fourth quarter and the entire fiscal year 2024-25, along with key decisions regarding bonus shares and dividends. After this announcement, there was movement in Nestle India's shares on the BSE and NSE on Thursday.
Market Surge with Bonus Share Announcement
Before the board meeting, Nestle India shares opened at ₹2422 on Thursday. But as soon as the bonus share was announced, a positive atmosphere developed in the market and the company's share rose to ₹2444.65 intraday. A rise of nearly one percent made it clear that investors were quite excited about this decision.
What does a 1:1 bonus share mean?
According to the proposal passed by Nestle India, one additional share will be issued for every existing share. This is a 1:1 bonus share proposal. This means that if an investor has 10 shares, they will get 10 more as a bonus and will have a total of 20 shares.
This proposal will be subject to the approval of the company's members, i.e., shareholders. The company has said that the record date required for issuing bonus shares will be announced soon.
Dividend Recommended as Well
Along with the bonus shares, the company has also recommended a dividend of ₹10 per share. This dividend has been declared for the fiscal year ending March 2025. The company has consistently distributed a portion of its profits to shareholders and this has been continued this time as well.
This dividend proposal from Nestle India indicates prioritizing the interests of the shareholders. This further strengthens the company's image as a reliable and beneficial entity for investors.
Why do companies give bonus shares?
When a company issues additional shares from its profits or reserves, it is called a bonus share. This increases the holdings of shareholders, but there is no change in the total capital of the company. Bonus shares are usually issued when the company has good profits and wants to increase the liquidity of its shares.
This step by Nestle India is also being seen in this direction. This will increase the number of the company's shares in the market and make it more accessible for small investors.
Record Date Announcement Soon
Nestle India has also said that the necessary record date for bonus shares will be announced at the appropriate time. The record date is the date up to which the investors holding the company's shares are entitled to the benefit of bonus shares.
The company has assured investors that as soon as this date is fixed, the information will be made public through stock exchanges.
Company's Position in Earnings and Business
Nestle India is among the leading consumer goods companies in the country. Brands like Maggi, KitKat, Nescafe, Milkmaid are present in every household. The company has performed well in the quarter ended March 2025 and has benefited its shareholders through bonus and dividends.
Despite continuous competition in the FMCG sector, Nestle India has bly maintained its presence. The company's product range, brand value, and distribution system continue to keep it ahead.
