Nestle India Limited has announced significant news for its investors. In a meeting held on June 26, 2025, the company's board of directors decided to issue bonus shares in a 1:1 ratio. According to this decision, investors holding one fully paid-up share of ₹1 face value will receive one additional bonus share of ₹1 face value free of cost. This announcement was made to the exchange after the market closed on Friday.
How Bonus Shares Will Be Distributed
The company stated that these bonus shares will be issued by converting its free reserves and accumulated surplus into capital. This means the company is converting a portion of its retained earnings into capital and giving free new shares to its shareholders. However, the record date for identifying eligible shareholders for these bonus shares has not yet been determined. The company has clarified that the record date will be announced later and is subject to shareholder approval.
What are Bonus Shares
Bonus shares are additional shares that a company gives to its existing investors free of charge. These shares are distributed in proportion to the shares already held by investors. In this process, the investor's total holdings increase, but there is no change in the overall value of the company. This maintains the company's liquidity and increases the availability of shares in the market.
Investors Also Rewarded with Dividends
Along with the bonus share announcement, Nestle India also announced the distribution of dividends. The company traded ex-dividend on Friday and provided a final dividend of ₹10 per share to eligible investors. This dividend was based on the results of the company's financial year 2024-25's final quarter.
Decline in Profit, but Growth in Revenue
Regarding the company's fourth-quarter financial results, Nestle India's profit decreased to ₹885.4 crore, while the company had earned a profit of ₹934 crore in the same quarter last year. This decline in profit is attributed to rising raw material costs. However, there was an improvement in the company's operational revenue. This time, Nestle's revenue increased by 4.5 percent to reach ₹5,503.8 crore, compared to ₹5,268 crore in the corresponding quarter last year.
Nestle's Performance in the Stock Market
On Friday, Nestle India's share closed at ₹2,392 with a slight increase. The share recorded a gain of approximately 0.15 percent on this day. However, over the past year, the company's share has seen an overall decline of about 6.02 percent. This means that investors have not received a very high return during this period.
What it Means for Investors
The bonus share announcement means that investors will receive more shares free of cost in proportion to the shares they hold. This will increase investors' holdings and could benefit them in the long run. Additionally, the company's dividend distribution clearly shows its commitment to sharing its profits with shareholders.
Waiting for the Record Date
Currently, the company has not announced the record date for the bonus shares. This date is essential to determine which investors held the company's shares on that day and are eligible to receive the bonus shares. The company has stated that the record date will be announced soon, and the necessary approvals will be obtained.
Looking at the Company's Past Track Record
Nestle India has long been considered among the companies that regularly provide dividends and bonuses to its investors. Its products are popular across the country, and its brand name holds a b position in the market. Due to products like Maggi, Nescafe, KitKat, the company is recognized in every household.
