Bonus Alert: CDSL jumps 9% after depository will issue free shares on July 2

Central Depository Services (India) Ltd. has informed the exchanges that it will hold a board meet on July 2 to consider an issue of bonus shares.

This will be the first instance of the company considering an issue of bonus shares to shareholders, according to data available on the exchange.

Record date for the said bonus issue is yet to be determined.

“A meeting of the Board of Directors of Central Depository Services (India) Limited (CDSL/Company) is scheduled to be held on Tuesday, July 02, 2024, inter alia, to consider and approve the proposal for issuance of Bonus Shares, if any, subject to the approval of the shareholders of the company,” it said in a filing.

The companies issue bonus shares to capitalise on their free reserves, increase their Earnings Per Share (EPS) and paid-up capital, along with reducing the reserves. Shareholders are issued these shares at no additional cost and hence are also known as free shares.

Only those investors will be eligible for bonus shares who will buy the stock before the ex-date. If an investor purchases the shares on the ex-date or after that, they will not be eligible to get bonus shares.

CDSL had recommended a final dividend of ₹19 per equity share for FY24. The company had also declared a special dividend worth ₹3 per share, taking the full year payout to ₹22 per share.

CDSL shares are trading 9.27% higher at ₹2,192.15. The stock has gained 96% over the last 12 months.