Samvardhana Motherson and Motherson Sumi Wiring Shares Go Ex-Trade for Bonus Issue
Shares of Samvardhana Motherson International Ltd. and Motherson Sumi Wiring India Ltd. have gone ex-trade on Friday for their bonus issue of shares. The bonus issue is a special type of share allotment where the company distributes additional shares to its existing shareholders.
What is a Bonus Issue?
A bonus issue is a way for companies to reward their shareholders with additional shares. This can be done in various ways, such as a 1:1 or 1:2 ratio. In the case of Samvardhana Motherson and Motherson Sumi Wiring, the bonus issue is being distributed in the ratio of 1:2, meaning one bonus share will be given for every two shares held.
How Does a Bonus Issue Affect Share Price?
The share price of a company adjusts in the ratio of the bonus allotment on the ex-date. This means that the share price will decrease by the same percentage as the bonus issue ratio. For example, if a company distributes a 1:2 bonus issue, the share price will decrease by 50% on the ex-date.
Eligibility for Bonus Issue
The company announces the ex/record date in advance, and only those who hold the shares in their demat account as of this record date will be eligible for the bonus allotment. This means that investors who purchase shares on the record date itself will not be eligible for the bonus issue.
Samvardhana Motherson and Motherson Sumi Wiring Share Price Reaction
Shares of Samvardhana Motherson were down 0.9% at Rs 101.65 as of 11:00 a.m. The total traded volume stood at two times the 30-day average with a turnover of Rs 64 crore, as per NSE data. The relative strength index was 48. Motherson Sumi Wiring was up 2.3% at Rs 43.94. The total traded volume stood at 3.5 times the 30-day average with a turnover of Rs 28 crore. The relative strength index was 73, indicating the stock is overbought.
India’s T+1 Settlement Cycle
Under India’s T+1 settlement cycle, investors must buy the shares at least one trading day before the record date to be eligible. This means that purchases made on the record date itself will not reflect in the demat account in time.
Deemed Date of Allotment and Trading
The deemed date of allotment of bonus shares for Samvardhana Motherson and Motherson Sumi Wiring will be Monday, July 21, 2025, and these bonus shares will be made available for trading on the next working day i.e., Tuesday, July 22, 2025.
Conclusion
The bonus issue by Samvardhana Motherson and Motherson Sumi Wiring is a favorable move for investors, as it increases the value of their holdings. However, it’s essential to understand the impact of this move on the share price and how it can affect investor sentiment. Investors should carefully consider the bonus issue ratio and the company’s financials before making any investment decisions.
