Bonus issues hit 10-year high

The 97 companies that have announced bonus issues so far include Bajaj Auto,Britannia Industries,Castrol,Dabur India,Engineers India,Rallis India,Sterlite Industries,TVS Motors,Wipro and Zee Entertainment. An interesting aspect of this surge is that it is dominated by mid and small-sized companies.

In a booming economy,companies have become more confident of their ability to service higher number of equity shares resulting in the bonus surge. This also reflects their optimism regarding the future prospects, a market analyst said.

The strong profit growth in the second quarter of 2010-11 triggered this flood of bonus issues. Zee Entertainment declared a 1:1 bonus issue logging a 53.7 growth in second quarter profit.

In the bonus issue chart,2005 stand second with 84 issues,followed by 2006 with 79,75 in 2007,64 in 2008,54 in 2004,44 in 2009,34 in 2002,32 in 2003 and 2001 stands last with just 23 bonus issues.

While 43 companies have declared 1:1 bonus so far,this year has also seen companies becoming more liberal in terms of bonus shares. For example,Signet Industries,Anukaran Commerce,Krishna Venture and Panoramic University have declared five bonus shares for every share held. Tulive Developer,Tilak Finance and Shree Ashtavinayak have each proposed four bonus shares for every share held.

Among the 97 companies,Empower Industries gave 23 bonus shares against two,the highest number of bonus shares,followed by RS Software and Apis India. The top bonus shares declarants during 2001-09 period include Onward Technology 3:2,Omax Autos 5:1,Empower Inds 9:1,Talbros Auto 5:2,Core Projects 12:1,Minal Industries 19:5,Mantra Realty 5:1,West Life Development 79:1 and Megh Mayur Infra 20:1. In 2010,highest number of companies declared bonus in September.