Bonus shares, stock split effect: Multibagger SME IPO turns ₹1.40 lakh to ₹5.49 lakh in two years | Stock Market News
Source: Live Mint
Bonus shares, stock split effect: Investing in stocks is like investing in a business. Hence, one should hold a stock as long as one can. This rule applies to both primary and secondary market investors. A long-term investor not just earns from stock price appreciation but from various other rewards that a listed entity declares from time to time. These rewards can be in the form of bonus shares, buyback of shares, stock split, interim, special, or final dividend, etc. Prima facie, these rewards may not look lucrative, but they help your money grow manifold in the long term. In other words, such rewards help an investor create wealth instead of just earning on one’s investments.
To understand how these rewards impact your investment, you need to look at the journey of Rhetan TMT shares. The BSE SME IPO was listed on September 5, 2022, after opening on August 22, 2022. The BSE SME IPO was offered at a fixed price of ₹70 apiece. Rhetan TMT IPO lot size comprised 2000 company shares. The SME IPO was listed on the BSE SME platform on 22nd August 2022 at ₹70 apiece. So, the SME IPO didn’t have a dream debut on Dalal Street. However, if an allottee had stuck with their conviction, the SME stock would have become a wealth-creating share for them. The SME stock declared a 1:10 stock split and 11:4 bonus shares in 2023. The stock traded ex-bonus and ex-split for the same on 10th March 2023. So, if an allottee had remained invested in this SME stock to date, it would have enjoyed the benefit of a 1:10 stock split and 11:4 bonus shares post-ex trade in March 2023.
Rhetan TMT stock split history
As mentioned above, Rhetan TMT shares traded ex-date for a 1:10 stock split on 10th March 2023. This means that one share of the company with a face value of ₹10 was subdivided into ten shares with a face value of Re 1 apiece. If an allottee had remained invested in this stock until date, its shareholding would have surged 10 times after this stock split benefit.
Rhetan TMT bonus shares history
As mentioned above, Rhetan TMT shares traded expdate for issuance of 11:4 bonus shares. This means eleven bonus shares for holding four company shares on 10th March 2023. If an allottee had remained invested in the stock to date, its initial shareholding would have surged by [(2000 / 4) x 11 = 5,500].
Bonus shares, stock split effect
As Rhetan TMT shares traded ex-date for 11:4 bonus shares and 1:10 stock split on the same date, if an allottee had remained invested in this SME stock till date despite flat listing, it would have benefitted on the initial lot size of the IPO, i.e. 2000 company shares. Due to a 1:10 stock split, its shareholding would have become 20,000 (2000 x 10). Due to 11:4 bonus shares, it would have got an additional 5500 bonus shares. So, the net shareholding of the allottee today had grown from 2000 to 25,500 (20,000 + 5,500 = 25,500).
₹1.40 lakh turns to ₹5.49 lakh
Rhetan TMT’s share price ended on Friday at ₹21.55 apiece on the BSE. So, if an allottee of this SME IPO had remained invested to date, the absolute value of one’s ₹1.40 lakh ( ₹70 x 2000) would have surged to ₹5,49,525 or ₹5.49 lakh ( ₹21.55 x 25,550).
Rhetan TMT shares are available for trade on the BSE only. They ended at ₹21.55 apiece on the BSE, with a trade volume of 71,95,797. The SME stock has a 52-week high of ₹22.49 and a 52-week low of ₹7.62.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
