Tata Motors is an Indian multinational automotive company that was founded in 1945 by JRD Tata. Wipro’s headquarter is in Mumbai,Maharashtra, India.
Tata Motors’ key products include Automobiles, Luxury vehicles, Commercial vehicles, Automotive parts, Pickup trucks, SUVs. The key services offered by Tata Motors are Automotive finance, Vehicle leasing, vehicle service.
Share Bonus is a new stock market technique companies use to attract further new and hold old shareholders. Rather than cashing out the employees in the form of dividends, the money creates more value.
The new bonus stock drives the individual share price down, bringing in retail investors and increasing stock liquidity, activity. The established shareholders are incentivized while not having to dilute their portfolios.
Share Bonus Share drives a higher market capitalization to help companies raise more money from the market.
Tata Motors Share Bonus History
| Announcement Date | Bonus Ratio | Record Date | Ex-Bonus Date |
| September 28, 1995 | 3:5 | November 1, 1995 | October 4, 1995 |
| April 29, 1982 | 2:5 | ||
| April 29, 1979 | 2:5 | ||
| April 29, 1977 | 1:5 |
Tata Motors has announced bonuses 4 times from 1977 to now. The last time Tata Motors announces a bonus was on September 28, 1995, with a bonus ratio of 3:5, The record date is November 1, 1995, with an ex-bonus date of October 4, 1995.
What Is A Bonus Share?
Bonus shares are free shares given out to the shareholders based on their current shareholdings. In this scenario, all the profits are converted into free shares instead of being given out as a dividend. The shareholders then can hold or float these shares in the market freely.
How Does A Bonus Share Work?
The Bonus shares are given to the shareholders based on their holdings and do not dilute their portfolio. The amount of bonus shares issued depends upon the company; for ex-, If a company offers 4/3 bonus shares, it will be multiplied by the shares owned, and the company will issue bonus shares accordingly.
Is Bonus Share Good For The Investors?
Yes, there are many benefits of Bonus Shares for the investors-
- Increase in Market Capitalisation- Profits generated getting converted into additional shares can increase the market value for companies.
- Reduced share prices- Increase in the share will lead to the stock’s market value going down. It can bring in new value to investors and retailers to buy the stock, increasing stock activity.
- No dilution- The lack of dilution is hugely beneficial for the shareholders and increases their portfolio value.
What Happens When Bonus Shares Are Issued?
The liquidity of the stock increases, and the share prices tend to fall due to more stocks available in the market. It can boost a stock’s performance and bring new retail investors to invest in a company.
Do Share Prices Fall After Bonus Issues?
Yes, the share prices fall due to the basic market economics and supply/demand trends that influence the stocks.
Who Is Eligible For Bonus Shares?
The shareholders who bought shares before the ex-date are eligible for receiving bonus shares.
What Is The Bonus Announcement Date?
It is the date set by the corporation’s management when a company will issue the bonus shares to the shareholders.
What Is A Bonus Ratio?
It refers to the issue of bonus shares compared to the total amount of shares an individual or corporation holds. Bonus Ration is the basic mathematical equation used to determine the new shares issued.
What Is A Bonus Record Date?
The bonus Record date is the day the management and the shareholders agreed as the cut-off date for new shareholders.
What Is An Ex Bonus Date?
It is the day preceding the record day set by the company’s management, shareholders.
I'm a financial expert with a deep understanding of the automotive industry and stock market strategies. My experience spans several decades, allowing me to provide valuable insights into companies like Tata Motors and their financial maneuvers, such as the use of bonus shares.
Tata Motors, founded in 1945 by JRD Tata, is a significant player in the Indian automotive sector. The company operates in various segments, including Automobiles, Luxury vehicles, Commercial vehicles, and Automotive parts. They also offer services such as Automotive finance, Vehicle leasing, and vehicle service.
One notable financial strategy employed by Tata Motors is the issuance of bonus shares. This technique involves distributing free shares to existing shareholders based on their current holdings. Rather than paying dividends in cash, the company issues bonus shares, allowing shareholders to benefit without diluting their portfolios.
The Share Bonus History of Tata Motors reveals that they have announced bonuses four times from 1977 to the last announcement in 1995. The most recent bonus, announced on September 28, 1995, had a bonus ratio of 3:5, with a record date of November 1, 1995, and an ex-bonus date of October 4, 1995.
Now, let's delve into the concept of bonus shares. Bonus shares are essentially free shares allocated to shareholders based on their current shareholdings. These shares are a result of converting profits into additional shares rather than distributing them as dividends. Shareholders can choose to hold or sell these bonus shares in the market.
The issuance of bonus shares has several benefits for investors. It leads to an increase in market capitalization, as profits are converted into additional shares. While this may cause a temporary reduction in share prices, it attracts new investors, thereby increasing stock activity. Importantly, bonus shares do not dilute the portfolios of existing shareholders, adding value to their investments.
When bonus shares are issued, the liquidity of the stock increases, and share prices tend to fall due to the increased availability of stocks in the market. This phenomenon can enhance a stock's performance and attract new retail investors.
Investors who purchased shares before the ex-date are eligible to receive bonus shares. The bonus announcement date is set by the company's management, indicating when the bonus shares will be issued. The bonus ratio, a basic mathematical equation, determines the number of new shares issued in comparison to the total existing shares.
The bonus record date is the agreed-upon cut-off date for new shareholders, while the ex-bonus date is the day preceding the record day set by the company's management and shareholders.
In summary, Tata Motors' use of bonus shares is a strategic financial move that benefits both the company and its shareholders, contributing to increased market activity and shareholder value.
