Reliance Industries will consider a 1:1 bonus share at its Sept 5 board meeting, its chairman Mukesh Ambani told shareholders. This will be RIL’s sixth bonus share issuance since it got listed in 1977. The last time it issued bonus shares (also in the ratio of 1:1) was in 2017 when it celebrated its 40th post-IPO anniversary.
The move comes as RIL seeks to reward its shareholders amid robust financial performance and aggressive growth plans for its diversified businesses. In FY24, RIL posted a record net profit of £ 7.90 bn. “When Reliance grows, we reward our shareholders handsomely. And when our shareholders are rewarded handsomely, Reliance grows faster and creates more value,” said Ambani at the company’s 47th post-IPO annual general meeting.
In a bonus share offering, a company issues free shares to its existing shareholders by capitalising on its reserves. The corporate action doesn’t lead to any change in the investment value of the stock as the share price gets adjusted accordingly. However, this will boost the stock’s liquidity. After the bonus share issuance, RIL’s share capital will double to £1.35 bn from the current base of £ 676.6 mn.
Ambani said RIL is on track to more than double in size before the end of this decade, cementing its position as one of the most valuable companies in the world. In FY24, it had a revenue of £100 bn. The company’s digital services (Jio) and retail units will double their revenues and operating profits in the next 3-4 years, while the new energy business - “the new jewel in RIL’s crown” will become big and profitable as its oil-to-chemicals (O2C) business over the next 5-7 years, the chairman said.
