2021, Vol. 4, Issue 2

author(s)
Rekha and Vandana Nasa

abstract
The word "financial investment" describes an investment in financial assets, such as stocks, bonds, debentures, warrants, etc., with the goal of making money via dividends, interest, or capital gains on the value of the underlying instrument. These kinds of investments are associated with the dangers of capital blockage and capital loss. Bonus shares, which are a portion of the company's profits, are given to existing shareholders free of charge in proportion to their current stake in the business. Bonuses given to existing shareholders raise the total number of shares on the market, which has no effect on the company's current market value. Bonuses are seen as a mark of appreciation and a gift from the "Board" to shareholders. After obtaining the bonus shares, the investor is exempt from paying taxes. It is especially advantageous for investors who want to raise funds to invest in the firm because they trust in its long-term prospects. The bonus issue enables the corporation to save money for future business investments. It serves as a signal to the market, letting them know that the firm has faith in its future expansion prospects. This study examines the potential of bonus shares in India, as well as the benefits and drawbacks from the perspectives of shareholders and corporations. Overall, this study offers a thorough grasp of bonus issues for shares in the Indian context.