Home / Markets / Stock Markets /  Bonus shares effect: Navratna stock turns 1 lakh into 2 crore in 23 years

Bonus shares effect: A long-term share investor not just enjoys benefit of appreciation in stock price but from other rewards that a listed company announces over the time from its capital reserves. Dividends, bonus shares, buyback of shares, rights issues, etc. are some of the major benefits that a long term stock investor enjoys over the short term investors. These rewards goes on to multiply one's return many-folds. Those who want to know how these long-term rewards impact one's investment, one needs to look at Bharat Petroleum Corporation Ltd or BPCL share price history.

This Navratna company has been giving dividends to its shareholders on a regular basis whereas it has announced bonus shares on four occasions since 2000. So, if an investor had invested in this state-owned company's stock, then due to these four bonus shares, its 1 lakh would have turned into over 2 crore today.

BPCL bonus share history

As per the information available on BSE website, BPCL has announced bonus shares in 2000, 2012, 2016 and 2017 respectively. BPCL shares traded ex-bonus on 20th December 2000 for issuance of bonus shares in 1:1 ratio. Similarly, it traded ex-bonus for issuance of bonus shares in 1:1 ratio on 13th July 2012 and 13th July 2016. Again on 13th July 2017, BPCL shares traded ex-bonus for issuance of bonus shares in 1:2 ratio.

Impact of bonus shares

Due to first three 1:1 bonus shares, a long term investor who had invested in BPCL shares in the beginning of 2000, its shareholding would have surged to 8 times (2 x 2 x 2). Later on, in 2017, the Navratna company declared 1:2 bonus shares that means the shareholding surged by 50 per cent as the company gave one bonus shares for every two shares held by the shareholder. So, the shareholding of the investor went to 12 times (8 x 1.5).


BPCL share price history

In the beginning of 2000, BPCL share price was around 20 apiece. If an investor had invested 1 lakh in BPCL shares, it would have got 5,000 BPCL shares. These 5,000 shares would have 12 times after the four bonus shares discussed above. 

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This means, one's total number of BPCL shares in one's demat account after issuance of bonus shares in 2000, 2012, 2016 and 2017 would have turned to 60,000.

1 lakh turns to 2 crore

BPCL share price today is around 335 per share. This means, absolute value of one's 1 lakh would have turned to 2.01 crore in these 23 years.

Asit Manohar
Chief Content Producer at Live Mint Digital Team
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