Home / Markets / Stock Markets /  Bonus shares 2 times: 1 lakh turns to 8.90 crore in 20 years. Do you own?

Praj Industries shares have given stellar return to its shareholders in stock market rebound during post-Covid rally. In last two years, this engineering stock has surged from around 60 apiece levels to 445.40 per share levels, giving 650 per cent return to its positional investors. However, for a long term investor, its income is not limited to appreciation in stock as Praj Industries has given bonus shares on two occasions in last 20 years. As per Praj Industries bonus share history, this multibagger engineering stock has given bonus shares to its shareholders in August 2005 and July 2007. On both occasions, it has issued bonus shares in 1:1 ratio.

Praj Industries bonus share history

As mentioned above, Praj Industries traded ex-bonus in August 2005 when it issued bonus shares in 1:1 ratio. Similarly, this multibagger engineering stock traded ex-bonus in 2007 as it once again issued bonus shares in 1:1 ratio.

Bonus shares impact

Twenty years ago, Praj Industries shares were available at a price of 2 per equity share. So, if an investor had invested 1 lakh in this engineering stock 20 years ago, it would have got 50,000 Praj Industries shares. As the engineering company announced bonus shares in 1:1 ratio in August 2005, its shareholding in the company would have doubled to 1 lakh company shares. Similarly, its shareholding in the company would have doubled to 2 lakh shares in 2007 after issuance of bonus shares in 2007.

1 lakh turns to 8.90 crore

Praj Industries share price today is 445.40 apiece. So, if an investor had invested 1 lakh in Praj Industries twenty years ago, its 1 lakh would have turned to 8,90,80,000 or 8.9 crore.

In case, there had been no bonus shares issued by Praj Industries, in that case 1 lakh invested by the investor twenty years ago would have grown to 2,22,70,000 or 2.22 crore. So, due to issuance of bonus shares, the investor's absolute return shot up four times from the normal share price appreciation.

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Asit Manohar

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