Season's flavour: Bonus issues

81 cos have declared bonus issues in 2005; India Inc just three short of a new record.

It's raining bonus issues this year as India Inc appears set to break a 10-year record. As many as 81 companies have declared bonus issues in the first nine months of 2005. This is just three short of the previous high of 84 bonus issues in 1995.

The number of companies announcing bonus shares was 66 in 2004, 34 in 2003, 48 in 2002 and 17 in 2001. Analysts said this clearly meant corporate India was confident that the growth momentum would be sustained and that it would be able to service the enhanced capital.

Among A group firms, Wipro, Mahindra and Mahindra, ITC, Gujarat Ambuja Cement and Asahi India Glass issued one bonus share for every one share held.

Of the total number of bonus issues, 30 companies have declared bonus shares in the ratio of one for every one share held and 16 companies have issued more than one share for every share held. Of the 16 companies, seven firms issued bonus shares in the ratio of two shares for one and five firms followed the ratio of three shares for one.

Of the 81 companies that have declared bonus shares, eight are from the A group and 73 are from the non-A group.