2:1 Bonus Issue: IT Penny Stock Turned; 1,600 Shares Market Lot Size Revised To 4,800 Shares

Naapbooks, an IT company, has turned ex-bonus on April 19. Accordingly, its market lot size has doubled to 4,800 shares from than previous 1600 shares. Naapbooks posted a 5% lower circuits after market hours on Friday.

On BSE, Naapbooks' share price stood at Rs 261.50 apiece, hitting a 5% lower circuit. Its market cap is at Rs 235.87 crore.

The company has fixed Friday, April 19, 2024, as the Record Date, to ascertain the eligibility of shareholders entitled to the issuance of Bonus Equity Shares in the proportion of 2 (Two) new equity shares of Rs. 10/- (Rupees Ten) each for every 1 (One) existing Equity Shares of Rs. 10/- (Rupees Ten) each.

Accordingly, the bonus issue ratio is 2:1. Only those investors will be eligible for the bonus share who hold Naapbooks stock by the end of April 19 in their demat accounts.

BSE circular, "Trading Members are requested to note the Change in the Market Lot of NAAPBOOKS LIMITED (543351) under the Bonus Issue of Equity Shares"

Hence, Naapbooks market lot size which was earlier 1600 shares have been increased to 4800 shares, adjusting to the 2:1 bonus issue.

What is the market lot size? As per Kotak Securities' website, a lot represents the number of units of a financial instrument as set out by the exchange.

How does a bonus issue impact a stock?

As per Zerodha, a bonus issue is a stock dividend allotted by the company to reward the shareholders. In regular dividends, cash is paid out to shareholders, but in a bonus issue, stocks are paid out instead of cash. The bonus shares are issued out of the reserves of the company. The shareholders receive these free shares against shares they currently hold.

Zerodha further explained that in a bonus issue, the stock price declines to the extent of the bonus ratio, but this decline should not be mistaken for a correction in stock price or a fall.

If the ratio is 2:1, the existing shareholders get two additional shares for every share they hold at no additional cost. So if a shareholder owns 100 shares, 200 additional shares will be rewarded. The total holding after the bonus issue will become 300 shares. When the bonus shares are issued, the number of shares the shareholder holds will increase, but an investment's overall value will remain the same, as per Zerodha.

Naapbooks will soon announce the allotment of bonus shares in detail.

Naapbooks is a FinTech company that is technologically driven with an all-encompassing experience of seven years in the IT industry. The company offers finance consultancy and software support services. Its energy is channelled into envisioning novel innovations such as mobile banking and cloud-based management software.