Mukesh Ambani announces AGM bonanza, RIL to consider bonus issue
“The Board of Directors is scheduled to be held September 5, 2024, to consider and recommend to the shareholders for their approval, issue of bonus shares in the ratio of 1:1 to the equity shareholders of the company by capitalization of reserves,” the company said in a filing.
RIL AGM Today: Track this space for all the important updates
The announcement comes on the heels of the company’s 47th annual general meeting (AGM), which will be held at 2 pm today.
Reliance has issued two bonus shares to investors in the last 15 years, with the most recent one announced at a 1:1 ratio in 2017.A company issues bonus shares to its shareholders to increase the liquidity of its stock and to lower its stock price, making it more affordable for investors.Bonus shares are fully paid additional shares issued by a company to its existing shareholders. When a firm issues bonus shares, shareholders do not incur any extra costs. The number of bonus shares received depends on the number of shares the shareholder already holds.All shareholders who own shares of the company before the record date, which is set by the company, are eligible for additional shares.
Once allotted, the bonus shares will rank pari passu in all respects, carrying the same rights as the existing equity shares. They will be entitled to participate fully in any dividends and other corporate actions recommended.
The proposal to consider the bonus shares for India’s most valued company amid the AGM, where investors are anticipating a clear blueprint for value unlocking from the Jio and Retail IPOs.
Market participants are also hoping for a concrete roadmap on the progress of new energy projects from the Ambanis. Investors might also get some updates on the stake sales in the mainstay oil and chemical segment
Following the announcement, shares of RIL jumped over 2% in intraday trade on Thursday. The stock beat the benchmark indices with a return of nearly 18% year-to-date.
“If we see stock performance pre and post AGM in the last 3 years, based on high hopes, pre-AGM moves are always positive like the way we are witnessing it from the last 15 days. While post AGM, historically we have seen negative trends due to fall in hopes. Overall we expect no big bang price action announcement from the AGM due today,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.
“Technically the stock is trading on a neutral make or break level, any close above 3060 we can see the price raising towards Rs 3,100, and any close below 2990 we can see a breakdown towards 2930 levels. We are on a wait and watch strategy,” he added.
