4:1 Bonus Issue Alert! Karnika Industries to Allot 4 Bonus Shares for Every 1 Held Today; Check Eligibilty

Kolkata-based garment manufacturer Karnika Industries, a prominent name in the Indian apparel sector, has announced a significant corporate action-a bonus issue in the ratio of 4:1. This means that shareholders will receive four additional equity shares for every one share they currently hold, subject to shareholder approval.

4:1 Bonus Issue: Karnika Industries To Record Bonus Shares on August 29

The company has set Friday, August 29, 2025, as the ex-date for the bonus issue. This is a crucial date for investors because only those who hold shares before this date will be eligible to receive the bonus shares.

Any shares bought on Thursday, August 28, 2025, or earlier will reflect in the investors' demat accounts in time, making them eligible for the bonus allotment. Shares purchased on or after the ex-date will not be entitled to the bonus issue.

Board Approval and Karnika Industries Shareholder Consent Required

In its filing with the National Stock Exchange (NSE), Karnika Industries stated, "The Board of Directors has considered and approved the issue of Bonus Equity Shares in the ratio of 4:1, i.e., four fully paid-up new equity shares for every one existing equity share held as on the record date." The record date to determine eligibility will be announced at a later time, subject to necessary regulatory approvals and shareholder consent.

The bonus issue remains subject to shareholder approval, which will be sought in the upcoming Extra-Ordinary General Meeting (EGM). The company has also committed to fulfilling all compliance and disclosure requirements under NSE regulations, particularly during its transition from the NSE Emerge Platform to the Main Board.

In the same regulatory filing, Karnika Industries added that it plans to migrate from the NSE Emerge platform to the Main Board of the National Stock Exchange. This move is generally seen as a positive signal, indicating the company's growth and readiness to meet the more stringent listing requirements of the Main Board.

The company stated, "After the necessary approvals in the ensuing EGM, the company undertakes to make necessary compliance and disclosures as required for listing/trading of its equity shares on the Main Board of NSE."

What Are Bonus Shares and Why Do They Matter?

Bonus shares are additional shares issued to existing shareholders from a company's free reserves, without any additional cost. They do not alter the overall value of the investor's holding, but they do increase the number of shares owned. As a result, the share price typically adjusts proportionally downward post-bonus, while the market capitalization remains largely unaffected.

A high bonus ratio like 4:1 is often interpreted as a sign of strong confidence by the company's management in its future profitability and performance outlook. However, experts advise investors not to get swayed by short-term excitement surrounding bonus issues. Instead, they should continue to evaluate company fundamentals, earnings potential, and broader market trends.