vendredi 23 décembre 2016

Effect of bonus shares on stock price

Query 1:

ONGC went ex-bonus on 15th/16th Dec with ratio of 1 share for every 2 shares held. Now that is a very generous allotment and I was of understanding that share price will correct correspondingly.

But when I see share price of last 6 months, it has been trading between Rs 150 - 200. Even now it is being traded at around Rs 200. So how come the price did not fall? If the price doesnt fall after such generous allotment then it would be lottery to those who had invested heavily! For eg., with an investment of Rs 1,00,000 you get stock of Rs 50,000 free (if share price doesnt correct).

Query 2:

ONGC had announced record date of bonus on 6th Dec. But it closed at a minor gain of 1% from closing of 5th to closing of 6th. If a company gives such a lucrative offer than doesnt the price should appreciate much more?! :confused:

I would be grateful if anyone can clarify this.


Effect of bonus shares on stock price

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