1:1 bonus shares, 1:10 stock split: Shares of Titan Company has been in base building mode for last one year. However, the Tata group stock gave some strong upside moves during July to October 2022 period. But, these topsy-turvy movement in Titan share price matter for those who took position in the scrip for short term. Long term investors may not bother much by these movements as Titan share price has ascended from ₹40 to ₹2,510 apiece levels in last 14 years. Those, who bought Titan shares after 2011 might have got an additional benefit of dividends announced by the company over the time but for those who bought this Tata company stock before 2011, they are getting benefit of one stock split and one bonus share issue that company announced in 2011.
As per the Titan share price history, this Tata group company traded ex-bonus on 23rd June 2011 for issuance of bonus shares in 1:1 ratio. This means, one share was issued for holding one share of the company.
Likewise, the Tata group stock traded ex-split for subdivision of shares in 1:10 ratio. Means, 10 Titan shares were issued to its eligible shareholders who held one stock of the company on the record date. This means, a Titan shareholder who held Titan stock before sub-division and issuance of bonus shares, their shareholding in the company surged many folds.
Impact of 1:1 bonus shares, 1:10 stock split
If an investor had invested ₹1 lakh in this stock 14 years ago doing bottom finishing, they would have got Titan shares paying ₹40 apiece or around 2,500 shares. After 1:1 bonus shares, their shareholding doubled to 5000 shares. These 5,000 Titan shares turned to 50,000 Titan after subdivision of shares in 1:10 ratio.
₹1 lakh turns to ₹12.55 crore
As Titan share price today is ₹2,510 apiece on NSE, if an investor had remained invested in this Tata group stock throughout the last 14 years, the absolute value of one's ₹1 lakh would have turned to ₹12.55 crore ( ₹2,510 x 2,500 x 2 x 10).
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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Published: 11 Feb 2023, 12:23 PM IST
I am an expert in financial markets and investment strategies, with a deep understanding of stock markets and corporate actions. My knowledge extends to the intricacies of stock splits, bonus share issuances, and their impact on shareholder value. I have closely followed the trends and historical data of various companies, including Titan Company, and can provide valuable insights into the dynamics of these financial maneuvers.
Now, let's break down the concepts mentioned in the article:
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1:1 Bonus Shares:
- This refers to a corporate action where a company issues one additional share for each existing share held by shareholders. In the context of Titan Company, they traded ex-bonus on June 23, 2011, meaning that investors holding Titan shares at that time received a bonus share for each share they already owned.
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1:10 Stock Split:
- A stock split involves dividing each existing share into multiple shares. In this case, Titan Company underwent a 1:10 stock split, which means that for every share held, shareholders received 10 new shares. This increases the total number of shares outstanding while proportionally decreasing the share price.
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Share Price Movement:
- The article mentions that Titan Company's shares have been in base building mode for the past year. However, there were strong upside moves from July to October 2022. The short-term fluctuations in share price may be of concern to those with short-term positions, but long-term investors may be less affected, given the substantial increase in Titan's share price over the last 14 years.
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Historical Performance:
- Titan Company's share price has shown significant growth, ascending from ₹40 to ₹2,510 apiece over the past 14 years. This robust performance is crucial for understanding the impact of the bonus shares and stock split on the overall shareholder value.
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Investment Scenario:
- The article provides an example scenario where an investor invested ₹1 lakh in Titan Company 14 years ago. Through the 1:1 bonus shares and 1:10 stock split, their initial investment of ₹1 lakh would have turned into ₹12.55 crore, considering the current share price of ₹2,510.
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Author Information:
- The article is authored by Asit Manohar, Chief Content Producer at Live Mint Digital Team. As an expert in financial content production, the author provides insights into the financial world and market events.
In conclusion, the article highlights the long-term impact of bonus shares and stock splits on Titan Company's stock, emphasizing the potential for substantial gains for early investors who held their positions through these corporate actions.
FAQs
A one-for-10 split gives you one share for every 10 shares you own. 3. This is the effect a split would have on the number of shares, share price, and the market cap of the company doing the split: Image by Sabrina Jiang © Investopedia 2020.
What is a 1 1 bonus of equity share? ›
This means that if a company declares a bonus issue of 1:1 then the number of shares of the company effectively doubles. In this case, since the number of shares has doubled, the stock price of the company will become half of what it was before the issue.
How do you calculate bonus and split shares? ›
For a 4:1 bonus issue, shareholders will receive four shares free for every one shareheld. So for 10 shares, will get 40 (4*10) shares in total. In a stock split in the 1:2 ratio, for every 1 share held, it will become 2 shares, for every 100 shares held, share count will become 200 shares.
What is the meaning of 1 10 bonus share? ›
A bonus of 1:10 implies that for every 10 shares that you hold, you will receive 1 additional share of the company. In this case, if you are holding 8 shares, you are entitled to 0.8 bonus shares.
Will NVDA go up after split? ›
What Nvidia's Stock Split Means. While the split increases the number of outstanding shares in circulation, it does not change the company's overall value or affect Morningstar's view of its stock.
Should I buy Nvidia before or after split? ›
That is not to say that you should not buy more Nvidia stock when it's trading at record highs. Rather, if you want to initiate or add to a position in Nvidia stock these days, the fact that it's effecting a stock split is immaterial.
Is 1% good equity? ›
For formal advisors, Dan recommends compensating them with startup equity that's worth between a 0.1 and 0.5 ownership percentage. If the formal advisor is “amazing” and “will also help with the fundraising process,” he suggests going as high as 1 percent.
How many days does it take for bonus shares to be credited? ›
How Bonus Shares Will Be Credited? The bonus shares will get credited to your DEMAT account. The process usually takes 10-15 days. bonus shares are additional shares allotted free of cost to shareholders.
Is BPCL giving bonus shares? ›
In May, BPCL announced that it would issue bonus shares to eligible shareholders in a 1:1 ratio. This means that for every share held, shareholders will receive one additional share in their Demat account.
Is bonus share profitable? ›
Bonus issues increase a company's outstanding shares but not its market capitalization. Companies usually fund a bonus issue through profits or existing share reserves. The issuance of bonus shares is not taxable; however, shareholders must still pay capital gains tax if they sell them for a net gain.
It doesn't matter if you own a stock before or after a split because the value won't change. A stock split is purely a mathematical decision that does not reflect the valuation of a company. If a company is going to perform well, it will before or after a split. If it won't, then it won't even after a split.
Can I sell bonus shares immediately? ›
Can I sell bonus shares immediately? The shares are credited in case of a bonus issue a few days (normally 15 days) after the ex-date. Thus the investor is unable to sell the share before it is credited to his demat account because doing so could result in an auction.
What does 1/10 share split mean? ›
Example 1: Suppose the company 'XYZ Limited' announced a stock split at a 1:10 ratio. This implies each existing share with a face value of Rs. 10 was subdivided into ten shares with a face value of Rs. 1. The record date for this split was set for January 10, 2024.
What are the disadvantages of bonus shares? ›
Disadvantages of Bonus Shares
As a result, the ability to raise money by following an offering is minimized. 2) When a company keep on issuing bonus shares instead of paying dividends, the cost of the bonus issued keeps adding up over the years.
What is a 1 for 10 bonus issue? ›
Example: For example, if Apple announces a 1 for 10 bonus issue or stock dividend, and you are holding 100 shares, if you hold this position through the ex-date, you would receive a new position of 10 new shares at a price level of 0 in Apple, and you would continue holding your initial position of 100 shares.
Is a 1 to 10 reverse stock split good or bad? ›
Reverse splits are often viewed negatively, as they signal that a company's share price has declined significantly, possibly putting it at risk of being delisted. The higher-priced shares following the split may also be less attractive to certain retail investors who prefer stocks with lower sticker prices.
Is it better to buy stock before or after a split? ›
It doesn't matter if you own a stock before or after a split because the value won't change. A stock split is purely a mathematical decision that does not reflect the valuation of a company. If a company is going to perform well, it will before or after a split. If it won't, then it won't even after a split.
What does a 1 for 20 stock split mean? ›
When a company splits its stock, that means it divides each existing share into multiple new shares. In a 20-1 stock split, every share of the company's stock will be split into 20 new shares, each of which would be worth one twentieth of the original share value.
Are stock splits good or bad? ›
It's basically a draw, and the value of your investment won't change. However, investors generally react positively to stock splits, partly because these announcements signal that a company's board wants to attract investors by making the price more affordable and increasing the number of shares available.
