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Informist, Monday, Aug 5, 2024

 

MUMBAI - The Securities and Exchange Board of India wants listed companies to credit bonus shares to investors within a day of the record date, and trading in the allotted shares to be available from the second day. The market regulator today issued a draft circular on this and has invited public comments on the issue by Aug 26.

 

SEBI said that under the current market practices and stock exchange processes with regard to bonus issues, the shares are credited and made available for trading in 2-7 working days post record date. An analyst at a brokerage house said that such a delay distorts the price discovery because technically the price in the market after the record date is ex-bonus, but the actual float in the market is lower by the number of bonus shares issued but not credited in shareholders' demat accounts. 

 

Current provisions under SEBI's issue of capital and disclosure requirements regulations only specify that the company announcing a bonus issue shall implement it within 15 days from the date of approval of the issue by its board of directors. In today's note SEBI said that in case a company approves a bonus issue that is subject to shareholders approving the capitalisation of profits or reserves, the company has only two months to implement the issue from the date of board approval.  End

 

Reported by Rajesh Gajra

Edited by Vandana Hingorani

 

 

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