ONGC share split and bonus

[top_phodu]

Hi, I am new in trading. I read the following news:

ONGC will give an interim dividend of Rs 32 a share of Rs 10 each. The record date for the same would be December 21, ONGC chairman RS Sharma said on Thursday.

It will also split each share into two and will give an additional share for each one held, added Sharma.

Does it mean that if I purchase 10 shares of ONGC on 18 Dec (Comming Monday), then I would get Rs 320 as divident. Also, 10 shares would be split into 20 shares of same value, and I would get 10 shares for free . So total number of shares in my demat account would become 30.

Is this correct?

 

[rvm123]

Rs.320/- dividend will be paid; 10 shares will be divided into 20 shares on split; 20 bonus shares will be credited and so, the balance withll be 20 + 20 = 40 shares and not 30

 

[top_phodu]

Thanks for the reply.

The cut-off date is 21-Dec. If I buy today (20-Dec), it ill take 2 days for the shares to appear in my demat. Will i still be eligible for the same?

Please reply by today, so that I can buy it

One more doubt. Dose'nt it mean that with these bonus shares, our capital invested will become double in a single day. so why dose'nt everyone in globe take shares of ONGC???? Secondly..why is it trading today at -24, if this is a good news???

 

[rvm123]

date of transaction is criteria. so, if u buy today on cum-bonus rate, u will be eligible for bonus 1:1.
To adjust bonus 1:1, market rate may come down by 50% after ex-bonus. So, ultimately, there may not be any gain in our capital.
rates are fixed by market conditions.

 

[top_phodu]

That is true. But ONGC is giving and additional share for free (as per my understanding)

Suppose I take one share of Rs 1000. After split, it becomes 2 shares of Rs 500 each. And then i get a bonus of 1 share for free :clapping:. So in total i have 3 shares. From Rs 1000 investment, I make Rs 1500 in a single day. Am i right?

Kindly explain me this line from ONGC statement:
It will also split each share into two and will give an additional share for each one held,

date of transaction is criteria. so, if u buy today on cum-bonus rate, u will be eligible for bonus 1:1.
To adjust bonus 1:1, market rate may come down by 50% after ex-bonus. So, ultimately, there may not be any gain in our capital.
rates are fixed by market conditions.

 

[rvm123]

ONGC board has approved the following:

"The board recommended approval of shareholders for issuance of bonus shares in the proportion of one new equity bonus share of Rs 5 each for every one existing equity share of Rs 5 each fully paid-up by capitalisation of reserves," the company informed in a filing".
So, first, your 1 share of Rs.10/- will be converted into 2 share of Rs.5/- each. Then for each Rs.5/- share, u will get one bonus share.