Bengaluru-headquartered IT major Wipro announced on Sunday that its board will consider issuing bonus shares. The outcome will be communicated alongside its financial results for the second quarter of fiscal year 2025.
A bonus issue is when a company distributes free shares to the existing shareholders. This may be chosen as an alternative to paying dividends. By increasing the number of shares available in the market, companies can improve liquidity, making it easier for investors to buy and sell shares. However, while the total number of shares increases in a bonus issue, the overall value of the investment remains unchanged.
The last time the company issued such shares was in 2019 when it issued one bonus share for every three shares held by shareholders.
“The Board of Directors of the Company will be considering a proposal for the issue of bonus shares, per the applicable provisions of the Companies Act, 2013, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, at its meeting scheduled to be held over October 16-17. The outcome of the Board meeting will be communicated to the stock exchanges soon after the conclusion of the Board meeting on October 17,” the company said in the filing.