Corporate actions always grab attention in the stock market, and one of the most exciting among them is a bonus share issue. Recently, a major company announced a 1:3 bonus share, creating a wave of interest among investors. This means that for every one share held, shareholders will receive three additional shares free of cost.
But what makes this announcement even more interesting is the fact that the company will distribute the bonus in two parts rather than crediting the entire entitlement at once. This unusual approach has left investors curious about how and when they will get their bonus shares.
Adding to the urgency, the company has set the record date this week. For investors, this timeline is crucial — only those whose names appear on the shareholder register on record date will be eligible for the bonus. If you are planning to benefit from this move, here’s everything you need to know in detail.
What Does a 1:3 Bonus Share Mean?
A 1:3 bonus share issue means that investors will get three new shares for every one share they currently hold. The shares are issued from the company’s free reserves, so shareholders don’t need to pay anything.
Example: If you own 100 shares, you will receive 300 more shares, increasing your total holding to 400 shares.
While the total number of shares goes up, the overall value of your investment remains the same because the market adjusts the share price. So, while you get more units of shares, the price per share will usually drop in proportion to maintain the same market capitalization.
Why Bonus in Two Parts?
Most companies issue bonus shares in one go. But in this case, the company has chosen to distribute the bonus in two phases. This can mean:
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First tranche: A portion of the bonus shares credited immediately.
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Second tranche: The remaining shares distributed later, possibly linked to another cut-off date.
This strategy could be linked to the company’s capital allocation and liquidity management. By splitting the bonus, the company ensures smoother reserve adjustment and financial discipline.
For investors, it means that the full 1:3 entitlement won’t reflect in your account immediately, so you’ll need to track announcements carefully to know when the second part is credited.
Record Date – Why It’s Important This Week
The record date is the date when the company finalizes the list of shareholders eligible for the bonus issue. If you hold shares on or before this date, you will get the bonus. If you buy after the ex-date, you won’t be entitled to it.
Since the record date is scheduled this week, investors have very limited time to act. You must ensure that your shares are settled in your demat account before record date (considering the T+1 settlement cycle).
This means:
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Buy shares at least one trading day before the ex-date.
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Verify that your demat account reflects the shares by record date.
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Do not sell before the second tranche, if eligibility requires continued holding.
Example of Bonus Issues and Record Dates
| Company | Bonus Ratio | Mode of Distribution | Record Date | Impact on Shareholders |
|---|---|---|---|---|
| Company A | 1:3 | Two-part allotment | This Week | More shares, price adjustment |
| Company B | 1:1 | Single allotment | Sept 2025 | Doubled shareholding |
| Company C | 2:5 | Phase-wise issue | 2024 | Shares credited in 2 tranches |
This table shows how bonus ratios and distribution strategies can vary from company to company.
Investor Checklist
✅ Things to Do
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Hold the stock before the record date to be eligible.
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Track the company’s notifications for the second tranche distribution.
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Stay invested if the second part requires continuous eligibility.
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Understand that stock price will adjust after bonus shares are credited.
❌ Things to Avoid
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Don’t buy shares after the record date expecting the bonus.
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Don’t panic if the price falls — the value remains the same.
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Don’t sell before clarifying the conditions for the second phase.
FAQs
1. What is a 1:3 bonus share?
It means shareholders will receive three free shares for every one share they already own.
2. Will my investment value increase after a bonus issue?
No, your total value remains the same. You just hold more shares at a lower adjusted price.
3. Why is this bonus being issued in two parts?
The company may be managing its reserves and capital allocation more efficiently by splitting the distribution.
4. What happens on the record date?
The company checks shareholder records to decide who is eligible for the bonus.
5. Can I buy shares on record date and still get the bonus?
No. You must buy before the ex-date so the shares are settled in your account by record date.
6. What if I sell my shares after record date?
If you sell after record date but before credit of the second tranche, you may still be eligible for the first part but may miss the second, depending on company policy.
7. Does share price always fall after a bonus issue?
Yes, share price usually adjusts downward in proportion to the bonus ratio.
8. How do I check if I received bonus shares?
You can check your demat account or broker statement once the bonus shares are credited.
9. Do bonus shares increase dividends in the future?
Yes, if the company continues to pay dividends, you will earn on a higher number of shares.
10. Is a bonus issue a sign of a healthy company?
Generally yes, since it shows that the company has strong reserves and wants to reward shareholders.
Conclusion
The announcement of a 1:3 bonus share issue, split into two parts, is a unique move that has caught the market’s attention. For investors, the record date this week is the key — only those holding shares on that date will benefit.
While the share price will adjust after the allotment, the long-term impact is usually positive, as bonus issues reflect management’s confidence and strengthen shareholder trust. Investors must act quickly, stay informed about the two-phase distribution, and avoid common mistakes to maximize the benefit from this bonus.