• The last time the IT stock traded ex-bonus was in May 2018
The money is not in the trading of shares on an intraday basis. In fact, people who have earned money from the stock market hold the stock for a long period of time and only then their money is seen multiplying. A long term stock market investor benefits not only from the rise in share price but also from the stock of the listed company. A listed company rewards its long-term investors by sharing its profits in the form of dividends. Apart from this, the company announces bonus shares, share buyback, stock split etc., which helps the long term investor to get profit in the long term.
To understand how the issue of bonus shares can change the fortunes of a long-term investor, we need to look at TCS shares. This Tata group stock has declared bonus shares in the ratio of 1:1 on three occasions in the last 18 years and if an investor had invested ₹1 lakh in this stock 18 years ago, then after these three its The shareholding increases eight times through 1:1 bonus share issue. In fact, its ₹1 lakh would have become ₹2.20 lakh today.
tcs bonus share history
TCS traded ex-bonus shares in 2006 when the IT giant announced 1:1 bonus shares to its shareholders. Later, the Tata group IT company traded ex-bonus, paying one bonus share to its shareholders for holding one TCS share in June 2009. In MAT 2018, the board of directors of TCS once again rewarded its long-term investors by announcing a bonus share for holding one share of the company.
effect of bonus shares
If an investor had invested ₹1 lakh in TCS 18 years ago, he would have got around 833 TCS shares, as one share of TCS was around ₹120 around 18 years ago. After the declaration of 1:1 bonus shares in 2006, these 833 shares of TCS would have become 1,666. Again in June 2009, these 1,666 shares of TCS would have become 3,332 TCS shares after the issue of 1:1 bonus shares by the IT company. After issuing 1:1 bonus shares in May 2018, these 3,332 shares of TCS would have further increased to 6,664 shares.
TCS share price today is around ₹3270 per share. So, the net worth of ₹1 lakh invested 18 years ago would have been ₹2.20 crore. Hence, someone's ₹1 lakh became ₹2.20 crore in the last 18 years and 1:1 bonus shares declared thrice in this period played a major role in this huge stock return to TCS shareholders.
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