BEL Share Price NSE Target, BEL Share Bonus 202: BEL or Bharat Electronics Limited has declared to issue bonus shares to its shareholders. BEL is an aerospace and defence electronics company. It is a PSU Navratna company under the Ministry of Defence. Founded in 1954, the state-run company has its headquarters in Bengaluru and manufactures advanced electronic products for the defence forces. BEL board of directors had earlier this month approved the share bonus proposal. As per the regulatory filing by BEL, the company will issue bonus shares to the shareholders in the ratio of 2:1. It means that the company will give two bonus shares for every one share held by the shareholders. Bonus share is one of the corporate actions.
BEL bonus shares will be issued free of cost to the shareholders. BEL share bonus is subject to approval of the shareholders of the company in the annual general meeting. BEL AGM is slated to take place on August 30.
A listed company, generally, issues bonus shares to shareholders for free. Once the bonus share is issued by determining the eligibility of shareholders on the record date, the price of the share adjusts accordingly. When a company announces a bonus share, the number of outstanding shares increases while the price of each share decreases.
BEL Bonus Share Ratio
In the BEL share bonus case, the price of per share will be adjusted in the ratio of 2:1, meaning suppose the BEL share price on the record date for the bonus is Rs 300 apiece, then it will be adjusted to Rs 100 apiece. The 52-week range of BEL share price is Rs 295.70 and 169.15 on the NSE as of August 19.
In other words, the bonus share reduces the share price, resulting in an increase in volatility. The intention behind the bonus share issue or other corporate actions is to increase liquidity in the capital market, resulting in wealth gains for investors. Besides enhancing liquidity, bonus share also widens the shareholder base as the stock becomes more affordable.
BEL Bonus Share History
From 2015 till now, BEL has issued bonus shares twice. The bonus shares have been issued in the ratio of 2:1 and 1:10 in 2015 and 2017, respectively.
BEL Share Price NSE Target
Meanwhile, HDFC Securities has recommended a Buy rating for the BEL in the range of Rs 288-294 and add more on dips to Rs 261.50. It has given a price target of Rs 319.50 and Rs 342.50 in basic case fair value and bull case fair value, respectively. The time horizon is 2 quarters.
BEL share price has gained around 6 per cent in the last 1 month while over 43 per cent and 60 per cent in the last six months and 1 year, respectively.
BEL is the largest domestic electronics manufacturer. It is the dominant supplier of radar, communication and electronic warfare equipment to the Indian armed forces.