Why haven't the bonus shares appeared in the holdings despite the decrease in stock price?

Bonus shares are additional shares issued to existing shareholders free of charge, based on the number of shares they already own. These shares are typically allocated in a predetermined ratio, such as 1:1, 2:1, or 3:1. To qualify for bonus shares, shareholders must hold the shares on the ex-date or record date, as defined by the T+1 settlement cycle. For example, if the ex-date/record date is April 10th, shareholders must purchase the stock on or before April 9th to be eligible.

The concept of eligibility also applies to dividends. When bonus shares are issued, the share price is adjusted downward in proportion to the bonus issue ratio. However, the total investment value remains unchanged, as the reduction in share price is offset by the additional shares received. If the bonus share allocation results in fractional shares, the cash equivalent of the fractional value is credited to the shareholder’s registered bank account.

Bonus shares are typically credited to a shareholder’s demat account within T+2 days from the record date. Shareholders are notified of the credit through CDSL. Initially, the bonus shares are held under a temporary ISIN and are not immediately available for trading. After receiving trading approval, which typically takes 4-5 days, the shares are transferred to the permanent ISIN and become tradable. The shares will only appear in Kite after this approval process is complete.

While awaiting the credit of bonus shares to the demat account, shareholders may notice a temporary drop in their portfolio’s Profit & Loss (P&L) displayed in Kite/Console. Once the shares are credited, the P&L reflects the accurate value. Note that Zerodha only updates the bonus quantity in Kite after the shares are credited. While both bonus issues and stock splits may appear similar in effect, there is a key difference: in stock splits, the face value of the shares is reduced.

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