Nykaa Bonus Share Issue: The board of FSN E-Commerce Ventures, the parent company of e-commerce brand Nykaa, has announced five bonus shares for each share shareholders hold, the company informed the stock exchanges. Following this development, the stock jumped close to 8 per cent to trade at Rs 1,370.65 over the previous close of Rs 1,273.80. Nykaa shares are down more than 34.24 percent in 2022 (year-to-date) so far.
What are Bonus Shares?
Bonus shares are fully paid additional shares issued by a company to its existing shareholders. Generally, a listed company distributes bonus shares on their existing equity shares to current shareholders free of cost. A listed company issues bonus shares due to free reserves and surplus and adding fresh capital. The face value remains the same post bonus issue.
Ex-bonus date is an important day for investors to be eligible for bonus shares. To become eligible for bonus shares, an investor should buy the stocks of a company at least one day or two days before the ex-date. This is because of the T+1 and T+2 settlement cycles.
Nykaa’s board said they would seek shareholders’ approval through a postal ballot and other approvals for the share issue. It fixed November 3 as the record date for determining members eligible for the bonus equity shares.
“We hereby inform that the Board at its Meeting held on October 03, 2022, inter alia, has approved bonus issue of equity shares in the proportion 5 (Five) fully paid-up equity share of Re 1/- each for every 1 (One) fully paid-up equity shares of Re 1/- each held by the shareholders of the company as on the record date, subject to shareholders’ approval by way of postal ballot," Nykaa informed in an exchange filing.
The company said that the issuance of bonus shares will be out of Securities Premium Account available as on March 31, 2022. Bonus shares are fully paid additional shares issued by a company to its existing shareholders. The actual number of bonus equity shares to be issued and post bonus issue share capital will be determined based on the paid-up share capital as on the record date, the company added.
The estimated date by which such bonus shares would be credited/dispatched would be within two months from the date of board approval i.e., on or before December 02, 2022.
Nykaa, founded in 2012 by former investment banker Falguni Nayar, has a diverse portfolio of beauty, personnel care and fashion products. The company’s shares were listed on stock exchanges BSE and NSE in November last year.
Nykaa’s initial public offering (IPO) was subscribed 81.78 times on the last day of subscription that closed on November 1, 2022, mainly helped by huge interest from institutional investors.