By BillCut
Last updated: 28 October 2026
बोनस शेयर, or bonus shares, are free additional shares that a company gives to its existing shareholders in a set ratio. You do not pay for them, and the company’s reserves are converted into share capital. SEBI’s investor guide says the share price falls in proportion to the bonus shares issued, so a bonus does not create value by itself.
What is a bonus share issue?
According to SEBI’s investor guide on corporate actions, a bonus issue gives shares only to existing shareholders in a certain proportion. The shares are issued at the existing face value, and the guide says the purpose is to distribute accumulated earnings without paying cash to shareholders.
How does the bonus ratio work?
The guide’s example is a 2:1 bonus, where a holder of one share gets two more and ends up with three. The table below uses an illustrative price of Rs 15, the same figure the guide uses.
| Item | Before bonus | After 2:1 bonus |
|---|---|---|
| Shares you hold | 100 | 300 |
| Share price | Rs 15 | Rs 5 |
| Value of your holding | Rs 1,500 | Rs 1,500 |
The adjustment factor is the new total divided by the old, which is 3, so Rs 15 divided by 3 gives Rs 5. Your holding is worth the same, in this example, but you hold more shares at a lower price.
What else changes after a bonus issue?
The guide lists these effects of a bonus issue.
- The number of outstanding shares goes up.
- Free reserves and surplus go down, because they are moved to share capital.
- Per share ratios such as earnings per share and book value per share fall.
- Liquidity on the exchange can increase.
What is the difference between a bonus issue and a stock split?
| Point | Bonus issue | Stock split |
|---|---|---|
| Meaning | Free additional shares to existing holders | Existing shares split into smaller shares |
| Face value | Stays the same | Falls in proportion to the split |
| Reserves | Reduced, with money moved to share capital | No impact |
Who gets the bonus shares?
The guide says the beneficiaries are shareholders as on the record date. The record date is announced by the company through the exchange. Check the announcement on the exchange for the ratio and the dates instead of relying on a tip. If a bonus is not credited, contact the registrar or your broker first, then file a complaint on SEBI’s SCORES portal. The shares are credited to your demat account, which BillCut’s guide to demat account basics explains.
Is a bonus issue a reason to buy a share?
Not by itself. Because the price adjusts, a bonus does not add value to your holding on day one. Be careful of messages that promise gains from a coming bonus. SEBI’s April 2025 press release advises dealing only with registered intermediaries, and you can report a fraud on the National Cyber Crime Reporting Portal or by calling 1930. BillCut has covered how finfluencers are being regulated and why panic selling hurts returns. If you are new to markets, start with the basics of the stock market in India.
Money borrowed to buy shares keeps charging interest whatever the shares do. If high interest dues are already straining your budget, Check your options with BillCut.
How BillCut can help
BillCut is a balance transfer and debt reduction platform. It works with lending partners to help eligible borrowers move high interest dues, such as credit card balances and personal loan EMIs, into one structured EMI. BillCut earns from helping borrowers refinance, so it has an interest in this option. Approval and terms depend on the partner lender.
Frequently asked questions
Disclaimer: This article is for general information only and is not investment, tax or financial advice. The price example is illustrative. Speak to a SEBI registered adviser or tax professional before acting.
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