In Short:
Oil refining and fuel marketing companies BPCL and HPCL are thinking of giving their shareholders bonus shares. This means they are considering offering free additional shares to existing shareholders. The goal is to make their stock more attractive for investors and show good financial health. This would be the fifth bonus issue for BPCL and the third for HPCL if approved. Both companies will make a decision on this at their upcoming board meetings on May 9.
Oil Companies to Mull Over Bonus Shares
Get ready, shareholders! Two major oil refining and fuel marketing companies, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), are all set to discuss the possibility of issuing bonus shares this week.
What are Bonus Shares?
For those not familiar with the term, a bonus issue (also known as a scrip issue or a capitalization issue) is basically like a little gift to existing shareholders in the form of additional shares. This move doesn’t affect the market capitalization of the companies.
Why Issue Bonus Shares?
Companies typically offer bonus shares to make their stocks more appealing to retail investors, provide an alternative to cash dividends, and signal financial strength.
Previous Bonus Share History
If approved, this would be the fifth bonus issue for BPCL, with the most recent one dating back to July 2017. As for HPCL, it will be their third time doling out bonus shares to their shareholders.
In the past, HPCL had distributed bonus shares in the ratio of 1:2 in July 2017, meaning shareholders received one extra share for every two they held. Meanwhile, BPCL had different ratios for their previous bonus share issues, ranging from 1:1 to 1:2, with the last one in July 2017.
Upcoming Board Meetings
In their filings to the stock exchanges, HPCL mentioned that their board will convene on May 9 not only to discuss bonus share issuance but also to approve financial results for the year 2023-24.
Similarly, BPCL’s board will also meet on the same day to review financial results for the quarter and fiscal year ending March 31, 2024, and to contemplate a final dividend recommendation. They hinted at the possibility of considering the issuance of bonus shares in this meeting as well.
Exciting news awaits the shareholders of BPCL and HPCL! Stay tuned for the outcome of these board meetings.
