Have you been tracking the movement of Reliance Industries Ltd (RIL) shares? Monday marked a significant moment as RIL shares turned ex-bonus for its sixth and largest bonus issue in Indian history—a 1:1 issue that has doubled shareholders’ stakes. What does this mean for investors, and how has the share price shifted following this major development?
The Bonus Issue and Its Impact on Shareholders
Reliance Industries recently declared a 1:1 bonus issue ahead of its Annual General Meeting (AGM), granting shareholders one bonus share for each share held. This latest bonus issue, the sixth in RIL’s history, is a milestone for the company and its investors. With each bonus issue, shareholders effectively double their holdings without making additional investments. Such an issue, especially on this scale, can profoundly affect stock liquidity, investor sentiment, and long-term market performance.
When RIL shares opened on Monday morning, they were adjusted for the bonus issue, reflecting a starting price of Rs 1,338—a 49.61% drop from Friday’s close of Rs 2,655.45. However, this apparent drop was only an adjustment, with the share price showing a modest gain of 0.77% on an adjusted basis.
How a Bonus Issue Affects Share Price and Shareholding
In financial terms, a bonus issue increases the number of outstanding shares in the market. As a result, the stock price adjusts downward in proportion to the bonus share ratio to keep the company’s overall valuation the same. This adjustment can make shares appear cheaper, often enhancing liquidity and opening doors for more investors. However, it also impacts the company’s free reserves and surplus, as they are adjusted to account for the additional shares.
This bonus issue was RIL’s first since 2017 when the stock was priced at Rs 725.65. Since then, RIL’s stock has surged by nearly 270%, delivering robust returns for its investors. This remarkable growth has led the stock to its latest adjusted value of Rs 2,655.45 just before Monday’s ex-bonus trading session.
Key Historical Context: RIL’s Bonus Issuance Track Record
Reliance Industries has a history of issuing bonuses at strategic points. The company’s previous bonus issuance was in 2009, when shares were issued in the same 1:1 ratio, and the stock turned ex-date on November 26 of that year. Notably, the 1997 issuance was also a 1:1 issue. Before this, RIL offered bonuses in the 6:10 ratio in 1983 and the 3:5 ratio in 1980. Each issuance has played a role in elevating the stock’s liquidity and rewarding shareholders, helping Reliance grow into one of India’s most valuable companies.
| Bonus History of Reliance Industries Ltd. | |||
| Announcement Date | Bonus Ratio | Record Date | Ex-Bonus Date |
| 05-09-2024 | 1:1 | 28-10-2024 | 28-10-2024 |
| 21-07-2017 | 1:1 | 09-09-2017 | 07-09-2017 |
| 07-10-2009 | 1:1 | 27-11-2009 | 26-11-2009 |
| 13-09-1997 | 1:1 | 29-11-1997 | 27-10-1997 |
| 28-10-1983 | 3:5 | 30-11–0001 | |
Moreover, RIL has proactively offered rights issues, with five offerings, the latest one issued in May 2020. In a strategic move in July 2023, RIL completed the demerger of Jio Financial Services Ltd, creating additional value streams within its expanding corporate structure.
RIL’s Market Influence Following the Ex-Bonus Adjustment
RIL’s influence on the broader Nifty 50 index cannot be overstated. As shares adjusted for the 1:1 bonus on Monday, Reliance’s stock was a key contributor to the index’s gains, which rebounded after five consecutive days of losses. Monday’s session saw RIL add approximately 20 points to the Nifty, indicating its significant weight on the index and broader market sentiment.
Despite recent market headwinds, RIL’s stock rebounded from oversold levels on Friday. The Relative Strength Index (RSI) dipped to 29.5, indicating that the stock was near an oversold threshold (an RSI below 30 generally suggests this status). By Monday, the stock had rallied, trading at Rs 1,349—up by 1.7% from its adjusted opening price, showing resilience and renewed investor confidence.
Broader Market Trends and RIL Share’s Position
The past month has been challenging for the Indian stock market, with BSE-listed companies losing market capitalization worth ₹41 lakh crore since September 27, when the Nifty reached a record high of 26,277. Amid this market turbulence, Reliance shares declined by 13%, resulting in a loss of Rs. 2.77 lakh crore in market capitalization. However, RIL’s shares have shown stability year-to-date, up by 2.53%, in contrast to the BSE Sensex’s rise of 9.87% over the same period.
Analyst Sentiment: A Mixed Yet Optimistic Outlook for RIL
Market analysts have mixed but generally positive expectations for RIL’s future performance. According to PL Capital Institutional Equities, RIL’s core refining and petrochemical businesses may face challenges soon due to a muted refining outlook. Still, gas production is expected to hold steady at 28-30 mmscmd with realizations of around $10/MMBtu. Furthermore, Jio’s Average Revenue Per User (ARPU) saw a 7% quarter-on-quarter increase, and projections suggest continued growth bolstered by recent tariff adjustments.
RIL’s retail business is expected to maintain steady performance. JM Financial notes that RIL’s strategic focus on renewable energy and the green sector will likely strengthen its position over the coming years. They also highlight the potential for revenue growth in Jio and retail operations within the next 3-4 years.
What Lies Ahead for Reliance Industries
Reliance Industries continues to adapt and expand, both domestically and internationally. The company’s ventures into retail, telecommunications, and green energy signal a forward-looking strategy that positions it for long-term growth. RIL has committed an impressive Rs 75,000 crore to its renewable energy initiatives, which could transform India’s clean energy landscape.
Additionally, analysts believe that the potential demerger of RIL’s retail and Jio Platforms, combined with the expansion of green energy initiatives, could strengthen the company’s value and increase shareholder wealth.
Conclusion
Reliance’s recent 1:1 bonus issue marks an important chapter in its history, reaffirming its role as a cornerstone of the Indian stock market. For current shareholders, the 1:1 bonus reflects RIL’s strategy to reward its investors while maintaining market liquidity. As RIL diversifies and adapts to market demands, its role within the Nifty 50 remains pivotal. Whether RIL can sustain the momentum of its impressive returns in the future is yet to be seen.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
