Three 1:2 bonus shares: Multibagger IPO turns ₹14,685 to ₹1.58 lakh in six years
Three 1:2 bonus shares: A long term stock market investor gets various rewards other than share price appreciation because listed entities announce various sops like bonus shares, interim or final dividend, buyback of shares at high premium, rights issues, etc.
In long term perspective, these rewards given by the listed companies from their reserved capital.
To understand how these rewards may impact one’s long term return, one needs to look at Varun Beverages IPO journey.
This multibagger IPO was launched in October 2016 at a price band of ₹440 to ₹445 per equity share. One lot of Varun Beverages IPO comprised 33 company shares, means minimum investment amount for a lucky allottee was ₹14,685 ( ₹4445 x 33).
This means, minimum Varun Beverages shares an allottee would have received after the finalisation of share allotment would have been 33.
Varun Beverages bonus share history
As per the information available on official BSE website — bseindia.com, Varun Beverages Ltd announced bonus shares thrice after listing on BSE and NSE. On all three occasions, Varun Beverages announced issuance of bonus shares in 1:2 ratio, which means one bonus share for every two shares held by the eligible shareholder.
After listing on BSE and NSE in November 2016, Varun Beverages stocks traded ex-bonus thrice on 25th July 2019, 10th June 2021 and 6th June 2022 respectively.
Bonus share impact
If a lucky allottee had remained invested in Varun Beverage after share allotment, its shareholding in Varun Beverages after these three 1:2 bonus shares would have surged to 109 today (33 + 16 + 24 + 36). And this rise in shareholding of that long term investor would have happened without any further investment.
See bonus share full calculation below:
- Varun Beverage shares after allotment: 33
- Total shares after first 1:2 bonus shares: 33 + (33-1)/2 = 49
- Total shares after second 1:2 bonus shares: 49 + (49-1)/2 = 73
- Total shares after third 1:2 bonus shares: 73 + (73-1)/2 = 109
₹14,685 turns to ₹1.58 lakh
So, after issuance of three 1:2 bonus shares, total shareholding of a lucky allottee would have surged to 109 shares. Varun Beverages share price today is around ₹1,450 apiece.
Therefore, absolute value of one’s ₹14,685 would have become ₹1.58 lakh ( ₹14,685 x ₹1,450) today.
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