What is the story about?
HDFC Bank Share Price: Shares of HDFC Bank Limited, the largest private lender, adjusted on Tuesday after the bonus issue’s record date in the ratio of 1:1. The scrip was down 1 per cent after opening at Rs 979.50 apiece, against the previous day close at Rs 982.10 apiece.
At noon, the scrip was trading at Rs 974.50 apiece with a drop of 0.79 per cent.
“This has reference to our intimation dated July 19, 2025, wherein the Board of Directors of HDFC Bank Limited (“Bank”) had approved the issuance of bonus shares in the ratio of 1:1 i.e. 1 equity share for every 1 equity share held by the shareholders as on the record date i.e. August 27, 2025 (“Record Date”) and also increase in the Authorised Share Capital of the Bank and consequential amendment to Memorandum of Association, subject to applicable approvals including from the Members of the Bank,” HDFC Bank said in the filing.
A bonus issue is when a company gives its existing shareholders additional shares for free in proportion to the number of shares they already own.
The HDFC Bank, which has its American Depositary Shares (ADS) listed on the New York Stock Exchange, informed that it will maintain the existing conversion ratio for its ADS at one ADS representing three equity shares of Re 1 each after its recently approved bonus issue.
To reflect the bonus issue, the Bank will direct its ADS depositary, JP Morgan Chase Bank, N.A., to increase the total number of ADS in the 1:1 ratio. This adjustment ensures that ADS holders receive the benefit of the bonus shares in line with the underlying equity shares.
What It Means For Investors
A bonus issue is when a company gives additional shares to its existing shareholders free of cost, usually in a fixed ratio. In a 1:1 bonus issue, for every one share an investor already owns, they receive one extra share. For example, if an investor holds 100 shares, after the 1:1 bonus they will own 200 shares. While the total number of shares doubles, the overall value of the investment remains the same initially because the share price is adjusted downward in proportion to the bonus. The key benefit for investors is that they hold more shares, which can increase liquidity and improve long-term wealth creation if the company performs well.
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