The board has approved to issue of Bonus equity shares in the ratio of 1:1.
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The board of Bemco Hydraulics Ltd has approved issuing bonus equity shares in the ratio of 1:1, meaning every shareholder will receive one additional share for each share they currently hold. This will double the total number of outstanding shares. Bonus issues are funded out of the company's reserves and do not involve any cash outflow. The company has not yet announced a record date or ex-date for the bonus entitlement.
While the number of shares held will double, the per-share price typically adjusts downward proportionally, so the overall value of a shareholder's holding remains largely unchanged in the short term. The move generally signals board confidence in the company's reserves and future prospects, and can improve liquidity by increasing the number of shares in the market.