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What is the story about?
Shares of IRB Infrastructure Developers Ltd. surged as much as 9% on Monday, March 30, as the stock began trading adjusted for the bonus issue of shares. The bonus issue was announced by the company last month.
The company has fixed Wednesday, April 1, as the record date for the bonus issue. Monday will be the ex-date for the same.
Ex-date is one business day before the record date. Shareholders need to purchase the shares before the ex-date to be eligible for the corporate action that the company has announced, whether it be a bonus issue, or dividends, or even a stock split.
A Record Date is when the company verifies the eligible shareholders for the corporate action. If you buy shares on or after the ex-date, you will not be eligible for the proposed corporate action.
In this case, if shares of IRB Infra were in your demat account on Friday, will make you eligible to avail the bonus shares. Buying them today or on Wednesday, would leave you ineligible for any bonus shares.
IRB Infra had approved a bonus issue in the ratio of 1:1 on February 13 this year. This means eligible shareholders will receive one bonus share for every one share they own as on the record date.
This is the first instance of the company announcing a bonus issue for shareholders, as it earlier carried out a stock split in February 2023, where it split one share of ₹10 into 10 shares of ₹1 each.
For instance, a shareholder has 100 shares of IRB Infra as of the record date and a 1:1 bonus issue would mean that the shareholder would receive an additional 100 shares in lieu of the 100 already owned.
This will take the shareholder's tally to 200 shares and the stock price will adjust according to the ratio of the bonus issue announced.
Shares of IRB Infra are now trading 8.8% higher on Monday at ₹22.28 after adjusting for bonus issue.
The company has fixed Wednesday, April 1, as the record date for the bonus issue. Monday will be the ex-date for the same.
Ex-Date Vs Record Date
Ex-date is one business day before the record date. Shareholders need to purchase the shares before the ex-date to be eligible for the corporate action that the company has announced, whether it be a bonus issue, or dividends, or even a stock split.
A Record Date is when the company verifies the eligible shareholders for the corporate action. If you buy shares on or after the ex-date, you will not be eligible for the proposed corporate action.
In this case, if shares of IRB Infra were in your demat account on Friday, will make you eligible to avail the bonus shares. Buying them today or on Wednesday, would leave you ineligible for any bonus shares.
IRB Infra Bonus Issue
IRB Infra had approved a bonus issue in the ratio of 1:1 on February 13 this year. This means eligible shareholders will receive one bonus share for every one share they own as on the record date.
This is the first instance of the company announcing a bonus issue for shareholders, as it earlier carried out a stock split in February 2023, where it split one share of ₹10 into 10 shares of ₹1 each.
How Do Bonus Issues Work
For instance, a shareholder has 100 shares of IRB Infra as of the record date and a 1:1 bonus issue would mean that the shareholder would receive an additional 100 shares in lieu of the 100 already owned.
This will take the shareholder's tally to 200 shares and the stock price will adjust according to the ratio of the bonus issue announced.
Shares of IRB Infra are now trading 8.8% higher on Monday at ₹22.28 after adjusting for bonus issue.
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