{"id":12696,"date":"2022-06-23T18:14:08","date_gmt":"2022-06-23T12:44:08","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=12696"},"modified":"2022-07-14T16:52:16","modified_gmt":"2022-07-14T11:22:16","slug":"all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/","title":{"rendered":"All You Need to Know about the Differences between Stock Split and Bonus Issue"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69d94499b9951\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d94499b9951\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#What_happens_to_Share_Price_in_Case_of_Bonus_Issue_and_Stock_Split\" title=\"What happens to Share Price in Case of Bonus Issue and Stock Split?\">What happens to Share Price in Case of Bonus Issue and Stock Split?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Difference_between_Bonus_Issue_and_Stock_Split\" title=\"Difference between Bonus Issue and Stock Split\">Difference between Bonus Issue and Stock Split<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Advantages_of_Bonus_Issue\" title=\"Advantages of Bonus Issue\">Advantages of Bonus Issue<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Creditworthiness\" title=\"Creditworthiness\">Creditworthiness<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Dividends\" title=\"Dividends\">Dividends<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Disadvantages_of_Bonus_Issue\" title=\"Disadvantages of Bonus Issue\">Disadvantages of Bonus Issue<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Time-consuming\" title=\"Time-consuming\">Time-consuming<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Volatility\" title=\"Volatility\">Volatility<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Advantages_of_Stock_Split\" title=\"Advantages of Stock Split\">Advantages of Stock Split<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Wide_reach\" title=\"Wide reach\">Wide reach<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Liquidity\" title=\"Liquidity\">Liquidity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Disadvantages_of_Stock_Split\" title=\"Disadvantages of Stock Split\">Disadvantages of Stock Split<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#No_real_change\" title=\"No real change\">No real change<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Expensive\" title=\"Expensive\">Expensive<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Final_Word\" title=\"Final Word\">Final Word<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Frequently_Asked_Questions\" title=\"Frequently Asked Questions\">Frequently Asked Questions<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#What_is_a_reverse_stock_split\" title=\"What is a reverse stock split?\">What is a reverse stock split?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#What_sign_does_the_bonus_share_issue_give_to_investors\" title=\"What sign does the bonus share issue give to investors?\">What sign does the bonus share issue give to investors?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#What_is_the_eligibility_for_bonus_issue\" title=\"What is the eligibility for bonus issue?\">What is the eligibility for bonus issue?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/#Interested_in_how_we_think_about_the_markets\" title=\"Interested in how we think about the markets?\">Interested in how we think about the markets?<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><span style=\"font-weight: 400;\">All publicly listed companies use a few measures to reward their shareholders. A bonus issue is one way of providing additional shares to the shareholders as a token of gratitude. For example, a company may offer these shares in the ratio of 1:5, i.e., for every five shares held, the shareholders will receive one<\/span> bonus share.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, a stock split is the splitting of a company&#8217;s stock. Therefore, it increases the number of shares of a company.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/kuvera.in\/explore\/fixed-deposit\/c\/all\"><img loading=\"lazy\" class=\"size-large wp-image-13417 aligncenter\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-1024x334.jpg\" sizes=\"(max-width: 640px) 100vw, 640px\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-1024x334.jpg 1024w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-300x98.jpg 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-768x250.jpg 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022.jpg 1080w\" alt=\"Online Fixed Deposits on Kuvera\" width=\"640\" height=\"209\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_happens_to_Share_Price_in_Case_of_Bonus_Issue_and_Stock_Split\"><\/span>What happens to Share Price in Case of Bonus Issue and Stock Split?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">First, we will consider the bonus share issue:<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A company will adjust the stock price in case of a bonus issue.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Consider this example:<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A bonus issue of 1:5 means that the shareholder will get one bonus share for every five shares held. The stock price before the bonus offer was Rs. 100, and the number of shares was also 100. After the <\/span>bonus issue of shares,<span style=\"font-weight: 400;\"> the number of shares increases to 120, but the value per share falls to Rs. 83.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Now let\u2019s understand the stock split with the help of an example:<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s say that a company has announced a stock split of 1:2. It means that for every 100 shares held by shareholders, they will have 200 shares. The face value of shares before the stock split was Rs. 100. Now, after the stock split, the face value of shares will be Rs. 50. If the stock is split in a 1:2 ratio, then the number of shares doubles while the share&#8217;s price halves.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Difference_between_Bonus_Issue_and_Stock_Split\"><\/span>Difference between Bonus Issue and Stock Split<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<table style=\"width: 100%;\" border=\"1.5\">\n<tbody>\n<tr>\n<td><b>Parameters<\/b><\/td>\n<td>\n<p style=\"text-align: center;\"><b>Bonus Issue\u00a0<\/b><\/p>\n<\/td>\n<td>\n<p style=\"text-align: center;\"><b>Stock Split<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><b>Definition<\/b><\/td>\n<td><span style=\"font-weight: 400;\">A company may issue a bonus share to its existing shareholders as a perk or appreciation token.<\/span><\/td>\n<td>Share split means<span style=\"font-weight: 400;\"> that a company is dividing its share into two or more shares depending on the split ratio.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Face value<\/b><\/td>\n<td><span style=\"font-weight: 400;\">The face value of a share does not undergo any change.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Face value decreases in case of a stock split. The reduction happens in proportion to the split ratio.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Objective<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Companies offer bonus issues as a substitute for dividends, reducing their accumulated reserves.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">The rationale behind the stock split is to increase the company\u2019s liquidity. It is also a means to increase the shareholder\u2019s coverage.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Who is eligible?<\/b><\/td>\n<td><span style=\"font-weight: 400;\">This applies to existing shareholders only.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">The benefits of a stock split are available to existing and potential investors.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Reserves and share capital\u00a0<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Reserves get reduced proportionately, whereas the share capital increases.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Both reserve amount and share capital remain the same.\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Future dividend<\/b><\/td>\n<td><span style=\"font-weight: 400;\">The dividend remains unaffected in case of a bonus issue.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Dividends will reduce in case of a stock split. The reduction will occur in a proportion of a stock split.\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Advantages_of_Bonus_Issue\"><\/span>Advantages of Bonus Issue<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Here are some advantages of the bonus issue:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Creditworthiness\"><\/span>Creditworthiness<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The issue of bonus shares to existing shareholders makes these companies more attractive to potential investors. Issuing bonus shares is a way of capitalising on their profits. Hence, the creditworthiness of companies increases in the eyes of investors.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Dividends\"><\/span>Dividends<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">You will receive additional shares in case of a bonus issue without any cost. This means you will receive additional dividends as well from these bonus shares.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Disadvantages_of_Bonus_Issue\"><\/span>Disadvantages of Bonus Issue<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">We will discuss some limitations of issuing bonus shares:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Time-consuming\"><\/span>Time-consuming<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A bonus issue requires approval from various regulatory bodies, making it a time-consuming process. Delays on the part of regulatory bodies may hamper the company&#8217;s plans.<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Volatility\"><\/span>Volatility<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A bonus issue is an unexpected announcement made by the company. Although it is beneficial to investors as they will receive extra shares without any monetary cost, the unexpected move may lead to volatility in the stock price.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Advantages_of_Stock_Split\"><\/span>Advantages of Stock Split<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Here are some advantages of a stock split:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Wide_reach\"><\/span>Wide reach<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A very high share price can negatively influence investors&#8217; interests in the<\/span><a href=\"https:\/\/app.kuvera.in\/explore\/stocks\/c\/all\"><span style=\"font-weight: 400;\"> stock market<\/span><\/a><span style=\"font-weight: 400;\">. To combat this, companies go for a stock split mainly to reduce the share price while keeping its value intact. It allows small investors to invest in the company, thus widening the shareholder base.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Liquidity\"><\/span>Liquidity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Companies split their shares, and as a result, the liquidity of their shares also increases. Demand for their shares also increases as more and more people become interested in them. It becomes easier to buy and sell shares on stock exchanges.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Disadvantages_of_Stock_Split\"><\/span>Disadvantages of Stock Split<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Some of the disadvantages are as follows:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"No_real_change\"><\/span>No real change<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In case of a stock split, the company&#8217;s fundamentals do not undergo any significant changes. The value of companies also does not change. So, it may be meaningless to carry out such a lengthy process without adding anything to the market capitalization of companies.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Expensive\"><\/span>Expensive<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A stock split is a lengthy process involving time and money. Companies hire merchant bankers to carry out this process; they charge very high fees for offering their services. Many people consider that a stock split is a mere cosmetic change, and high costs incurred on these may be put to use somewhere else.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Final_Word\"><\/span>Final Word<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p>Bonus shares <span style=\"font-weight: 400;\">and<\/span> <span style=\"font-weight: 400;\">stock splits are two important ways a company may carry out internal restructuring without altering its fundamentals. It is more important from a company\u2019s point of view; the only real benefit that existing shareholders receive is additional shares without any monetary cost.\u00a0 \u00a0 <\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"What_is_a_reverse_stock_split\"><\/span>What is a reverse stock split?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">As the name suggests, a reverse stock split is the opposite of a stock split. In the case of a reverse, the number of shares in a company decreases. All outstanding shares stand rescinded, and the company allows new shares to exist shareholders in proportion to the reverse stock split ratio.\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<ul>\n<li aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"What_sign_does_the_bonus_share_issue_give_to_investors\"><\/span>What sign does the bonus share issue give to investors?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Issuing bonus shares to investors shows the decent financial health of the company. This is a positive signal for prospective investors. \u00a0 <\/span><\/p>\n<p><b>\u00a0<\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"What_is_the_eligibility_for_bonus_issue\"><\/span>What is the eligibility for bonus issue?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Before the record date, any shareholder having shares in the company is eligible for a bonus issue. The record date is when a company decides for shareholders to become eligible for bonus issues.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Interested_in_how_we_think_about_the_markets\"><\/span>Interested in how we think about the markets?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p>Read more: <a href=\"https:\/\/kuvera.in\/blog\/category\/zen-and-the-art-of-investing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Zen And The Art Of Investing<\/strong><\/a><\/p>\n<p>Check out all our &#8220;Investor Education Originals&#8221; videos on Youtube and get smart about investing.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><iframe loading=\"lazy\" title=\"How to choose between Stocks &amp; Mutual funds | Explained\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/N1li1d9X0jw?list=PLDSzQdT9nLmBFD2p94O5p2pZ4vEUR-Thz\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit <a href=\"http:\/\/app.kuvera.in\"><strong>Kuvera.in<\/strong><\/a> to discover <a href=\"https:\/\/kuvera.in\/blog\/direct-plans-better\/\"><strong>Direct Plans<\/strong><\/a> and <strong><a href=\"https:\/\/app.kuvera.in\/explore\/fixed-deposit\/c\/all\">Fixed Deposits<\/a><\/strong> and <a href=\"https:\/\/kuvera.in\/user\/login\"><strong>start investing today.<\/strong><\/a><br \/>\n#MutualFundSahiHai #KuveraSabs<\/p>\n","protected":false},"excerpt":{"rendered":"<p>All publicly listed companies use a few measures to reward their shareholders. A bonus issue is one way of providing additional shares to the shareholders as a token of gratitude. For example, a company may offer these shares in the ratio of 1:5, i.e., for every five shares held, the shareholders will receive one bonus [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":11,"featured_media":12697,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[99,679],"tags":[1029,388,1028],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>All You Need to Know about the Differences between Stock Split and Bonus Issue - Kuvera<\/title>\n<meta name=\"description\" content=\"A bonus share to its existing shareholders as a perk or appreciation token. A stock split is a company is dividing its share into two or more shares depending on the split ratio.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"All You Need to Know about the Differences between Stock Split and Bonus Issue - Kuvera\" \/>\n<meta property=\"og:description\" content=\"A bonus share to its existing shareholders as a perk or appreciation token. A stock split is a company is dividing its share into two or more shares depending on the split ratio.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-the-differences-between-stock-split-and-bonus-issue\/\" \/>\n<meta property=\"og:site_name\" content=\"Kuvera\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/kuvera.in\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-23T12:44:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-14T11:22:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/06\/Differences-between-Stock-Split-and-Bonus-Issue.png\" \/>\n\t<meta property=\"og:image:width\" content=\"2240\" \/>\n\t<meta property=\"og:image:height\" content=\"1260\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Kuvera\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:site\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kuvera\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"All You Need to Know about the Differences between Stock Split and Bonus Issue - Kuvera","description":"A bonus share to its existing shareholders as a perk or appreciation token. 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