HDFC AMC shares gain after stock begins trading adjusted for 1:1 bonus issue

Shares of asset manager HDFC Asset Management Company (HDFC AMC) Ltd., begun trading adjusted for their bonus issue of shares announced by the company earlier from Wednesday, November 26.

The record date for the bonus issue was fixed for today's session.

HDFC AMC, in a first after becoming a public company, had announced the issue of one bonus share for every one share held by eligible shareholders as on the record date.

Those shareholders, who had shares of HDFC AMC in their demat account as of closing on Tuesday, will be eligible for the bonus issue of shares. Those who buy shares of the company today will not be eligible for the same.

This means that the number of shares that you will be having in the demat account will be adjusted in equal proportion as per the issue ratio.

For example, if you had 100 shares of HDFC AMC in your demat account as of Tuesday's close, the 1:1 bonus would mean you would receive 100 free shares as well, taking the total number of shares to 200. The share price will adjust accordingly and the value of the shares you own would remain the same.

This is the first such corporate action that HDFC AMC has carried out for its shareholders other than regularly paying dividends.

Based on the September quarter shareholding pattern, HDFC AMC had 4.1 lakh small retail shareholders, or those with authorized share capital of up to ₹2 lakh, who had a 6.57% stake in the company.

Shares of HDFC AMC are trading 0.75% higher on Wednesday at ₹2,688.5. The stock is down 4% in the last one month, but has gained 29% so far this year. The stock is also up nearly 5x from its IPO price of ₹1,100 per share.