Patanjali Foods Rewards Investors with Bonus Shares in 2:1 Ratio
On July 17, 2025, Patanjali Foods Ltd announced a bonus share issue in the ratio of 2:1, rewarding shareholders with two new shares for every one they currently hold. This corporate action was approved by the Board of Directors and reflects the company’s aim to increase liquidity and boost shareholder confidence.
The bonus issue will be funded using the company’s capital redemption reserve, securities premium, and general reserve, and is subject to shareholder approval.
How the Patanjali Bonus Share Issue Works
- Board Approval Date: July 17, 2025
- Bonus Ratio: 2 new equity shares for every 1 existing share
- Face Value: ₹2 per share
- Eligibility: Shareholders on record as of a yet-to-be-announced record date
- Allotment Deadline: Bonus shares will be credited or dispatched by or before September 16, 2025
Why Is Patanjali Issuing Bonus Shares?
The company aims to:
- Reward long-term shareholders
- Increase stock liquidity by making shares more affordable
- Expand retail participation and trading volume
This is a non-cash benefit where investors receive additional shares without needing to pay anything.
Capital Expansion and Reserves Used
- Current Share Capital: ₹145.00 crore (36.06 crore shares)
- Post-Bonus Share Capital: ₹217.50 crore (108.75 crore shares)
- Reserves as per March 31, 2025:
- Capital Redemption Reserve: ₹266.93 crore
- Securities Premium: ₹4,704.37 crore
- General Reserve: ₹418.15 crore
The company has confirmed it has sufficient reserves to carry out this bonus issue, as reflected in its latest audited balance sheet.
What It Means for Investors and the Market
- Price Adjustment: The share price will adjust proportionally (approximately one-third of the pre-bonus price), but total investment value remains unchanged.
- Improved Liquidity: More shares in circulation can lead to increased trading activity and lower price volatility.
- Positive Signal: Bonus issues are generally seen as a sign of strong financial health and long-term growth confidence.
- Record Date Pending: Only shareholders who own the stock as of the record date will be eligible. This date will be announced soon by the company.