(HBL)
Oil refining and fuel marketing companies Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) will this week consider issuing bonus shares to their shareholders.
In separate filings to the stock exchanges, the two firms said their boards will meet on May 9 to consider and approve the issuance of bonus shares. A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders. It increases a company’s outstanding shares but not its market capitalisation.
Companies issue bonus shares to make their stock more attractive for retail investors, provide an alternative to a cash dividend, and/or reflect a position of financial health. If approved, this would be the fifth bonus issue by BPCL, the last being in July 2017. In the case of HPCL, it will be the third time the company will be distributing bonus shares to its shareholders.
HPCL had previously, in July 2017, given bonus shares in the ratio of 1:2, entitling shareholders to receive one additional share for every two shares held. Prior to that in September 2016, the firm had issued bonus shares in the ratio of 2:1.
