When Bonus Shares are Credited in Demat Account?

Bonus shares are usually credited after the record date, once the company completes its verification and allotment process. The credit timeline may vary slightly depending on the company and the registrar, but investors can generally expect the bonus shares to reflect in their Demat account within a few days. This article explains everything investors need to know about when bonus shares are credited to a Demat account. Bonus shares refer to additional shares issued by a company to its existing shareholders at no extra cost. They are allotted in a fixed ratio based on the number of shares already held, increasing the total number of shares in the investor’s Demat account without requiring any extra investment. Since bonus issues are common corporate actions, investors often have a common question — when exactly will these bonus shares be credited? 

Who is Eligible to Receive Bonus Shares 

Here’s how companies determine which shareholders are eligible for bonus shares: 

• The first thing that companies do is fix a record date to decide who will receive bonus shares. 
• After the bonus announcement, trading continues, so shareholder lists keep changing. 
• To identify eligible shareholders, the company’s bookkeepers check the ownership records on the record date. 
• The company also announces an ex-date, which is the last day to buy shares and still qualify for the bonus. 
• Investors who buy shares after the ex-date are not eligible for bonus shares. 
• As the Indian stock market follows a T+2 rolling settlement, here the ex-date is set two trading days before the record date. 

Guidelines to be Followed by a Company Before Issuing Bonus Shares 

The following are the guidelines that needs to be followed by a company before issuing bonus shares:  

• Bonus shares can be issued only after the company’s Articles of Association permit it; otherwise, shareholder approval through a special resolution is required. 
• The shareholders must approve the bonus issue in the general meeting. 
• The company must comply with SEBI guidelines related to bonus issuance. 
• The bonus issue must not cause the paid-up capital to exceed authorised capital; if needed, the authorised capital must be increased beforehand. 
• If the company has outstanding loans or regulatory obligations, it must obtain necessary approvals and notify relevant authorities before issuing fully paid-up bonus shares. 

How to Check Bonus Shares in a Demat Account? 

Here’s how investors can check when shares are credited in Demat account. 

• Through broker’s platform: Investors can log in to the trading app or web portal then navigate to the Holdings or Portfolio section and then check the updated share count for the company that issued the bonus. 
• Through NSDL/CDSL: Investors can sign in using their BO ID then open the Holding Statement or Account Summary. In this section, the credited bonus shares will appear along with the existing holdings. 

Conclusion 

Bonus shares provide investors with additional value without any extra cost, making them an important part of corporate actions to understand. Knowing when bonus shares are credited to a Demat account, how eligibility is determined, and the guidelines companies must follow ensure investors stay informed and avoid confusion during bonus announcements. By regularly checking holdings through a broker platform, online trading app, or NSDL/CDSL, investors can easily track the credit of bonus shares and manage their portfolios more effectively.