Regarding Bonus by Motherson Sumi on 5/7/2017

Q&A: Questions & Answers Portfolio Q&A
1

Hi all,

This is my first post. I am reading Basic investment threads to learn the companies fundamental analysis from couple of day on Valuepickr. Thanks for providing such wonderful platform.

I have one question regarding Motherson Sumi which I bought in 2015. I had bought 25 quantities. Recently company has declared bonus 2 shares for every 1 equity share held. What I understood from this is that after bonus credited to my portfolio, total qty of Motherson Sumi shold be 25 (existing share) + 25*2 (50 bonus shares) = 75. But I can see total qty 37 shares. It is exactly opposite, means for existing 2 shares I got 1 share.

Is my understanding wrong by declared bonus 2 shares for every 1 equity share held?

Regards,
Parag

2

It’s not two shares for every one held, but one for every two held. You held 25, and so you are entitled to 12, which is the nearest number below 12.5, which is what you should have got theoretically. The total is 25+12=37.