Fundamental Glossary / Shareholding & Ownership
Bonus Shares
New shares issued free to existing shareholders by capitalising reserves. The share count rises and the price adjusts down.
Formula
A 1:1 bonus doubles the share count. Book value per share roughly halves. The owner's total claim does not change on the day.
What it means
A bonus is a split paid for by moving reserves into share capital. No cash enters the company. The shareholder's wealth is unchanged except for taxes and the optics of a lower price.
Companies with large reserves and a high share price use bonuses to improve affordability of one share and to signal accumulated profit.
How to read it
Adjust every per-share series for the bonus before you compute growth. Unadjusted EPS will appear to crash.
What to watch
A bonus does not make the company cheaper in any fundamental sense. Market cap is unchanged at the moment of issue. Anyone selling "cheap after the bonus" is selling the arithmetic.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.