RIL's past bonus issues fail to lift sentiment

After the latest bonus issue, the paid-up equity share of RIL will double from 3,251 mn to 6,503 mn

Shareholders might have cheered the bonus issue announcement by Reliance Industries (RIL) at its annual general meeting (AGM), however, it may not alter the oil-to-telecom conglomerate’s fortunes by much looking at the past. Previous two bonuses— in 1997 and 2009 — by the country’s most valuable company, have failed to fuel any rally in its stock price. In fact, the RIL scrip had mostly underperformed the benchmark S&P BSE Sensex over a short-to-medium term period after 1997 and 2009 bonus issues (see table).

RIL on Friday announced 1:1 bonus, meaning every shareholder of the company will get one free share