Infosys Limited is an Indian corporation
that provides knowledge based information technology, consulting and outsourcing
services. It is headquartered in Bangalore, Karnataka.
Infosys is the
second-largest Indian IT services company in terms of revenues, On 22nd May 2015, its market capitalization is ₹ 276,000 crores ($40.92 billion), making it one of India's largest traded company on the bourses.
It is considered to be one of the blue chip companies in India.
INFOSYS AND ITS
COMPETITORS
Name
|
Last Price
|
Market Cap.
(Rs. cr.) |
Sales
Turnover |
Net Profit
|
Total Assets
|
2,529.30
|
498,380.34
|
85,863.85
|
22,882.70
|
45,666.71
|
|
1,201.60
|
276,000.87
|
47,300.00
|
12,164.00
|
57,157.00
|
|
543.40
|
134,258.56
|
45,096.40
|
8,099.00
|
40,655.20
|
|
736.65
|
103,908.91
|
13,433.35
|
4,733.68
|
19,432.97
|
|
475.85
|
46,176.62
|
19,162.65
|
2,256.23
|
12,486.50
|
The current price of Infosys is 1201.6/share.
Now why am I talking about Infosys ?
It is because Infosys has regularly rewarded its investors with bonus shares.
There are some Pundits and experts who more often than not talk about bonus shares with some degree of caution.
They talk about increase in share holder's fund .But that can be discussed in other posts.
Now, what is a bonus share?
A bonus share is a free share allotted to common share holders. While it increases the float in the market, the value of the company does not change.Many consider it a gift from the company to show its gradually increasing financial strength. Besides if the profitability of the company increases there is a greater chance that the dividend increases and also benefit the investors in terms of their greater share holding.
However the value of the shares decrease proportionately to the number bonus shares issued.
Confused?
Please do not be confused.
Remember that the issue of bonus shares more often than not increases the credibility of the company!!!
Now why am I talking about Infosys ?
It is because Infosys has regularly rewarded its investors with bonus shares.
There are some Pundits and experts who more often than not talk about bonus shares with some degree of caution.
They talk about increase in share holder's fund .But that can be discussed in other posts.
Now, what is a bonus share?
A bonus share is a free share allotted to common share holders. While it increases the float in the market, the value of the company does not change.Many consider it a gift from the company to show its gradually increasing financial strength. Besides if the profitability of the company increases there is a greater chance that the dividend increases and also benefit the investors in terms of their greater share holding.
However the value of the shares decrease proportionately to the number bonus shares issued.
Confused?
Please do not be confused.
Remember that the issue of bonus shares more often than not increases the credibility of the company!!!
Here it is how!!!
The comapny may opt for either a bonus issue or a stock split. Realistically both have the same effect. Both increases the liquidity of the share, that is , more investors can buy the shares at a price which they can afford for the month or the year.
For example if Infosys issues a bonus share now at the ratio of 1:1, then the existing shareholders shall get Infosys shares at the rate of 1201.06/2= Rs 500.53.
And what is the advantage?
The advantage lies in the fact that If I have Rs 1000 to invest this month , I can buy one share of Infosys. Had it been 1200, I would not have been able to buy this share.
But above all things the investor seeks to maximize his wealth.
How?
Here is the data for you .
Disclaimer: This blog is for informational and entertainment purposes only, and the content herein should not be mistaken for professional financial advice. You alone are responsible for the decisions you make in life, so please contact an independent financial professional for advice regarding your specific situation.
The comapny may opt for either a bonus issue or a stock split. Realistically both have the same effect. Both increases the liquidity of the share, that is , more investors can buy the shares at a price which they can afford for the month or the year.
For example if Infosys issues a bonus share now at the ratio of 1:1, then the existing shareholders shall get Infosys shares at the rate of 1201.06/2= Rs 500.53.
And what is the advantage?
The advantage lies in the fact that If I have Rs 1000 to invest this month , I can buy one share of Infosys. Had it been 1200, I would not have been able to buy this share.
But above all things the investor seeks to maximize his wealth.
How?
Here is the data for you .
Announcement Date
|
Bonus Ratio
|
Record Date
|
Ex-Bonus Date
|
24-04-2015
|
1:1
|
-
|
15-06-2015
|
10-10-2014
|
1:1
|
03-12-2014
|
02-12-2014
|
14-04-2006
|
1:1
|
14-07-2006
|
13-07-2006
|
13-04-2004
|
3:1
|
02-07-2004
|
01-07-2004
|
25-01-1999
|
1:1
|
05-03-1999
|
08-02-1999
|
18-06-1997
|
1:1
|
12-09-1997
|
19-08-1997
|
Source : Dion Global Solutions Limited
What was the priceof Infosys on 19/08/1997?
The close price of Infosys was Rs17.97/share.
Incidentally there was also a stock split of 2:1 on the same date.
Stock split indicates dividing the share into equal parts with decrease in face value of the share.
So if someone held one share of Infosys on 12/08/1997, by 19th he would have been holding 4 shares on the 19/08/1997 with proportionate decrease in the price of the share.
19/08/1997 - 1 share converted to 4 shares.
08/02/1999- 4 shares converted to 8 shares
01/07/2004- 8 shares converted to 32 shares.
13/07/2006 - 32 shares converted to 64 shares
02/12/2014- 64 shares converted to 128 shares
15/06/2015 128 shares converted to 256 shares!!!
Now you had 1 share at the cost of 17.97 on 12/08/1997.
Without doing anything , without selling, weathering all the economic downturns now the total value of Infosys shares is equal to an astronomical
256*1201.6= Rs 307,609.6!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
INFOSYS HAS RETURNED A STAGGERING 17000% RETURN , LEAVE ALONE THE DIVIDEND!!
PATIENCE!! PATIENCE!! PATIENCE!!
You wait, you win!!! No question asked!!!!
Disclaimer: This blog is for informational and entertainment purposes only, and the content herein should not be mistaken for professional financial advice. You alone are responsible for the decisions you make in life, so please contact an independent financial professional for advice regarding your specific situation.
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