HDFC Bank , one of India's leading private sector banks, marked a significant milestone as its shares commenced trading ex-bonus on Tuesday. The bank has issued bonus shares in a 1:1 ratio, representing its first bonus issue in over three decades of trading history.

Bonus Issue Details

The 1:1 bonus ratio means that shareholders will receive one additional share for every share they currently hold. This corporate action applies to shareholders who owned HDFC Bank shares as of Monday's market close. While the number of shares will double, the stock price is expected to adjust proportionally, ensuring that the overall value of shareholders' holdings remains unchanged.

Historical Context

This bonus issue is a notable event for HDFC Bank, being its first in more than 30 years of trading. However, the bank has previously undertaken other corporate actions to enhance shareholder value:

• Stock split in 2011
• Another stock split in 2019

Recent Stock Performance

Prior to the ex-bonus date, HDFC Bank's shares closed at ₹1,969.20 on Monday. The stock has shown mixed performance recently:

• Down 2.00% over the past month
• Up over 10.00% year-to-date

Market Impact

The bonus issue is likely to improve liquidity in HDFC Bank's shares, potentially making them more accessible to a broader range of investors. However, it's important to note that bonus issues do not directly affect the fundamental value of the company.

Other Corporate Actions in the Banking Sector

In related news, Karur Vysya Bank is also trading ex-bonus on the same day, with a different ratio:

• Bonus issue ratio: 1:5 (one bonus share for every five shares held)

This coincidence highlights the ongoing trend of Indian banks using corporate actions to reward shareholders and potentially enhance stock liquidity.

Investors and market participants will be closely watching how HDFC Bank's stock price adjusts to this significant corporate action in the coming trading sessions.

HDFC Bank has joined three other companies in announcing bonus share distributions this week, marking a significant move for shareholders. The banking giant has declared a generous 1:1 bonus share ratio, with the record date set for August 26.

Bonus Share Details

HDFC Bank's bonus issue will provide shareholders with one new share for every existing share held. This move effectively doubles the number of shares for current investors without diluting their overall stake in the company. The record date of August 26 is crucial for determining eligibility for the bonus allocation.

Other Companies Announcing Bonus Shares

In addition to HDFC Bank, three other companies have announced bonus share distributions:

Important Notes for Investors

• All bonus issues announced are subject to shareholder approval.
• Under India's T+1 settlement cycle, investors must purchase shares at least one trading day before the record date to be eligible for the bonus allocation.

The announcement of bonus shares by these companies, particularly the substantial 1:1 ratio by HDFC Bank, is likely to generate increased interest among investors. Shareholders of these companies should mark their calendars and ensure they meet the eligibility criteria to benefit from these bonus issues.