Top 3 Stocks Declaring Bonus Shares in November 2023

The Indian stock market remained the eye candy of foreign institutional investors (FIIs) throughout 2023, taking the Nifty 50 and the BSE Sensex to their all-time highs till September 2023.

However, the tide turned in October 2023, with the global sentiment turning negative.

Amid these challenging market conditions, inflation, and geopolitical tensions, select companies have devised a strategy to reward investors without straining their cash reserves: bonus shares.

The allure of receiving something for free, coupled with the satisfaction of earning a bonus, makes bonus share issues a welcome move for investors.

Bonus shares are free shares that shareholders receive against shares they currently hold.

Here are three stocks that will trade ex-bonus in November 2023.

#1 Jeena Sikho Lifecare

First on the list is Jeena Sikho Lifecare.

Jeena Sikho Lifecare is the leading ayurvedic healthcare system provider in India, offering brands such as Shuddhi Ayurveda, Shuddhi Clinics, Origine & HIIMS hospital.

On 16 October 2023, the board approved the proposal to recommend bonus shares in the ratio of 4:5. The company will issue 4 equity bonus shares to shareholders for every 5 shares held.

The board has fixed 2 November 2023 as the record date to determine the eligibility of shareholders.

In the financial year 2023, the company achieved a remarkable 39.7% year-on-year (YoY) increase in revenue, reaching Rs 2 billion (bn).

Additionally, the net profit for the year amounted to Rs 3.4 billion, reflecting an impressive 99% YoY growth. This substantial upturn can be attributed to increased sales and a reduction in interest expenses.

Looking ahead, the company has strategic plans to expand its market presence and boost sales.

For more details, see the Jeena Sikho company fact sheet and quarterly results.

#2 Giriraj Civil Developers

Second on the list is Giriraj Civil Developers.

Giriraj Civil Developers provides construction services. The company constructs civil buildings, towers, roads, bridges, and other infrastructure projects.

The company's board announced bonus shares on 28 August 2023.

It will issue bonus shares in a ratio of 4:1. This means four new bonus shares for every existing one share in the company.

The record date for the same is 3 November 2023.

For the fiscal year 2023, the company posted a 14.6% year-on-year growth in revenue, amounting to Rs 951.3 million (m).

Moreover, the net profit for the year stood at Rs 45 m, indicating an 18.7% year-on-year increase. This surge was due to an upturn in new orders and a reduction in raw material costs.

Going forward, the company is set to benefit from the government's Production-Linked Incentive (PLI) scheme to bolster the engineering sector's growth and development.

The Make in India initiative seeks to attract foreign investment, foster innovation, and create employment opportunities in the manufacturing sector.

For more details, see the Giriraj Developers company fact sheet and quarterly results.

#3 Sonata Software

Last on the list is Sonata Software.

Sonata offers IT services and product licensing & deployment services to its customers in the United States, Europe, the Middle East, and India.

The company provides IT services to travel, retail & commodities and manufacturing and software vendors.

On 25 October 2023, the board approved the issue of bonus shares in the ratio of 1:1. This means one bonus share for every one existing share.

The company has yet to fix the record date for the bonus issue.

The board also declared an interim dividend of Rs 7 per share (700% on par value of Rs 1) for the financial year 2023-24. The company has fixed 7 November 2023 as the record date for payment of the interim dividend.

For the September 2023 quarter, the company's revenue came in at Rs 19.1 bn, down 11% YoY, as it is a seasonally weak quarter for domestic product business. The net profit for the quarter came in at 1.2 bn, up 10% YoY.

Going forward, the company will focus on its Multi-Cloud Management offerings and System Integration business to drive future growth.

For more details, see the Sonata Software company fact sheet and quarterly results.

Conclusion

Investing in stocks that announce bonus shares can be an attractive proposition for some investors as the perception is that bonus shares can enhance shareholder value by increasing the number of shares held without diluting ownership.

Additionally, companies that issue bonus shares often have a history of profitability, increasing the likelihood of future dividend distributions, which can provide additional income to shareholders.

While bonus shares can be attractive, investors should consider other factors such as the company's overall financial health, growth prospects, and market conditions.

Dilution concerns and individual circumstances should also be considered.

For companies with a long history of issuing bonus shares, check out 5 Indian companies which have consistently declared bonus shares.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...