March 22, 2023

highlights

E-commerce company Nykaa is in limelight these days for issuing bonus shares.
The lock-in period for pre-IPO investors ended on 10 November.
In the bonus issue, the company allots additional shares to its investors in a fixed proportion.

New Delhi. Shares of e-commerce company Nykaa are in limelight these days. The listing of Nykaa’s shares on November 10 last year created a stir among the people. The listing at 80 per cent premium made the investors who invested money in this IPO happy. The company had allotted shares in the IPO at a price of Rs 1,125 per share. Then a year later, Nykaa’s shares are in headlines for other reasons. On November 10 this year, the lock-in period for pre-IPO investors in Nykaa’s shares ended.

The company announced the Nykaa Bonus Issue, the record date of which was 11 November. The company claims that the purpose of the bonus issue is to increase the interest of retail investors in the shares. But some investors say that the company has done this to prevent them from selling the shares. Nykaa’s shares are in headlines regarding this.

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What happens in bonus issue
Let us tell you that in the bonus issue, the company allots additional shares to its investors in a fixed proportion. For example, if a ratio of 2:1 has been fixed for a bonus issue, it means that the investor will get two additional shares for every one share he holds. Due to the bonus issue, the number of his shares will increase from 1 to 3.

what will be the settlement
There will be no change in the total value of these 3 shares. Their total value will be the same as that of one share earlier. If earlier the share price was Rs.900, then after the bonus issue its price will be Rs.300.

Tags: share market

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