Trent shares fall after stock trades adjusted for 1:2 bonus issue - All you need to know

Shares of Tata Group enterprise Trent Ltd. declined on Thursday, June 4, after the stock begun trading adjusted for the bonus issue of shares announced by the company after its June quarter results.

Important For Trent Shareholders

Trent had announced earlier that it will be issuing bonus shares in the ratio of 1:2, which means eligible shareholders will be entitled to receive one bonus share for every two shares that they own as on the record date, which was fixed as Thursday, June 4.

This means that those shareholders, who brought shares of Trent and had it in their demat accounts as of closing on Wednesday, June 3, will be eligible to avail the bonus shares as well.

However, those who buy shares today, will not be entitled to receive the bonus shares.

How Does The Bonus Issue Adjust For Trent

For instance, if a shareholder has 200 shares of Trent as of the record date, which is today.

A 1:2 bonus issue would mean that the shareholder would receive an additional 100 shares as bonus, as part of the 200 shares he owns (1:2).

This will take the total number of shares owned by that shareholder to 300.

The share price will adjust according to the bonus issue ratio.

How Many Shareholders Does Trent Have?

Promoters of Trent held a 37% stake in the company at the end of the March quarter.

Among public shareholders, Mutual Funds had a 13.92% stake, insurance companies owned 6.36%, Foreign Investors had a 15.6% holding, while nearly 5 lakh retail individual shareholders, or those with authorized share capital of up to ₹2 lakh, had a 14% stake in the Tata Group stock.

Trent's Corporate Action History

This is the first instance of Trent announcing a bonus issue for its shareholders.

Back in 2016, the company had split one share of ₹10 each into 10 shares of ₹1 each.

The company has paid dividends to its shareholders every year.

This year too, the company has announced a final dividend of ₹6 per share, the record date for which is Friday, June 12.

Therefore, for those who buy shares of Trent today, they may not be eligible to avail the bonus issue, but will be eligible to receive the dividend payout.

Shares of Trent are now trading 2.6% lower on Thursday after the adjustment at ₹2,783.