Corporate India looks set to beat its seven-year record this year in terms of bonus issues made. In the first five months of the current calendar year, 33 companies have proposed bonus issues. The previous best was in 1997, when 45 companies declared bonus issues of shares.
The current binge of showering bonus shares comes after six barren years. In 2001, only 26 firms declared bonus issues, followed by 27 in 2002, and 23 in 2003.
But what is even more heartening is that the bonus issues this year have been much more liberal than in the past. For instance, Infosys Technologies and Jagsonpal Pharmaceuticals have both proposed three bonus shares for every share held. Wipro, Alembic and Federal Bank have each proposed two bonus shares for every share held. At the same time, in 2004, 19 companies have offered one bonus share.
April was by far the best month this year, with 11 companies making bonus announcements. There were five announcements each in January, February and May. In March, only three companies offered bonus shares, while in June, four companies announced bonus issues.
Orient Abbrasives, Tata Steel, Federal Bank and Tube Investments have announced bonuses in June. Tata Steel has offered one bonus share for every two shares held, while Tube Investment is making a 1:1 bonus issue.
The information technology sector leads the list with seven companies declaring bonuses. There are six bonus issues from the pharmaceuticals sector, two each from the fast moving consumer goods, banks and paint sectors.
The best-ever years for bonus issues were 1993 and 1994 when more than 100 companies declared bonuses. In 1993, as many as 152 companies declared bonus issues. In 1994, 124 companies issued bonus shares, followed by 88 in 1995.