Nestle India , a leading food and beverage company, has made a significant announcement that is set to benefit its shareholders. The company has declared its first-ever bonus share issue and has set August 8 as the record date for this corporate action.

Bonus Issue Details

Nestle India has announced a 1:1 bonus issue, meaning shareholders will receive one free share for every share they hold. This move will effectively double the number of outstanding shares of the company. The last day for investors to purchase shares to qualify for this bonus issue is August 7.

Implications for Shareholders

This bonus issue serves multiple purposes:

1. Rewarding long-term shareholders: The bonus shares are a way for Nestle India to reward its loyal shareholders who have held onto the company's stock.

2. Improving stock accessibility: By increasing the number of outstanding shares, the stock price is expected to adjust proportionately, potentially making it more accessible to a broader range of investors.

3. Increasing liquidity: With more shares in circulation, the liquidity of Nestle India's stock in the market is likely to improve.

Recent Financial Performance

In its latest quarterly results, Nestle India reported mixed financial outcomes:

• Revenue: The company's revenue from operations increased by 6% to Rs 5,096.00 crore.
• Profit: However, the profit after tax saw a decline of 13.4%, settling at Rs 647.00 crore.

While the revenue growth is positive, the decline in profit might be a point of concern for investors.

Conclusion

The announcement of Nestle India's first-ever bonus issue comes at an interesting time, given the company's recent financial performance. While the bonus issue is likely to be welcomed by shareholders, investors will also be keeping a close eye on the company's ability to improve its profitability in the coming quarters. As always, investors are advised to conduct their own research and consider their financial goals before making investment decisions.

Nestle India , a leading food and beverage company, has made a significant announcement that is set to benefit its shareholders. The company's board has recommended its first-ever bonus share issue in a 1:1 ratio, marking a milestone in its corporate history.

Bonus Share Details

The bonus shares will be issued at a face value of Re 1 each, with the record date set for August 8. This means that shareholders must hold Nestle India shares in their demat accounts by this date to be eligible for the bonus allotment. Given India's T+1 settlement cycle, investors looking to capitalize on this opportunity need to purchase shares at least one trading day before the record date.

Recent Dividend Payout

Prior to this bonus issue announcement, Nestle India had declared a final dividend of Rs 10.00 per equity share. The company has already completed the payout of this dividend on July 26, further rewarding its shareholders.

Stock Performance

The news of the bonus issue has been well-received by the market. Nestle India's shares closed 1.20% higher at Rs 2,276.50, outperforming the broader market as the NSE Nifty 50 index fell 0.82% on the same day.

However, looking at the longer-term performance, the stock has shown mixed results:

• Over the past 12 months: Declined by 8.35%
• Year-to-date: Gained nearly 5.00%

Analyst Outlook

The current analyst sentiment on Nestle India appears cautiously optimistic:

Out of 40 analysts covering the company, the majority (20) suggest a 'hold' position. The average 12-month consensus price target indicates a 4.70% upside potential from the current price levels.

This bonus issue announcement, coupled with the recent dividend payout, underscores Nestle India's commitment to enhancing shareholder value. As the record date approaches, investors will be closely watching the stock's performance and considering their position in light of this corporate action.