When companies issue bonus shares, they distribute additional equity shares to existing shareholders without any cost. The bonus share ratio defines how many additional shares are given for each share already owned. For example, a 1:2 ratio means for every 2 shares you own, you receive 1 extra share.
Understanding the bonus share ratio is crucial for investors, traders, and analysts who want to assess how their shareholding changes post-issue. The Bonus Shares Ratio Calculator is a simple tool to calculate this ratio based on the number of shares held before and after receiving the bonus.
Formula
Bonus Share Ratio = Bonus Shares ÷ Original Shares
Expressed as:
1 : (Original Shares ÷ Bonus Shares)
For example, if you held 1,000 shares and received 500 bonus shares:
Bonus Share Ratio = 500 ÷ 1000 = 0.5 → 1:2
This means 1 bonus share for every 2 original shares.
How to Use the Bonus Shares Ratio Calculator
- Enter the Original Shares: Number of shares you held before the bonus.
- Enter Bonus Shares Received: The quantity of shares received as bonus.
- Click “Calculate”: The calculator will display the bonus share ratio in standard format (e.g., 1:2).
This helps you understand your entitlement and verify bonus distributions.
Example
Suppose:
- Original Shares = 2,000
- Bonus Shares Received = 1,000
Then:
Bonus Share Ratio = 1,000 ÷ 2,000 = 0.5 ⇒ 1:2
You received 1 bonus share for every 2 shares held.
FAQs
1. What is a bonus share ratio?
It’s the number of bonus shares issued for every share held (e.g., 1:2 means 1 share for every 2 held).
2. Why do companies issue bonus shares?
To reward shareholders using retained earnings and improve stock liquidity.
3. Does the bonus ratio affect stock price?
Yes — the price is adjusted downward in proportion to the bonus ratio.
4. How is 1:3 bonus interpreted?
You receive 1 bonus share for every 3 original shares you hold.
5. Do bonus shares increase my investment value?
Not directly — total value remains the same immediately post-issue.
6. Are bonus shares free?
Yes — they are issued without any cost to shareholders.
7. Can I sell bonus shares?
Yes — once they are credited, they are fully tradable like regular shares.
8. How do I calculate the ratio if I know my bonus quantity?
Use this calculator by entering your original and bonus share counts.
9. What is the formula in decimal?
Bonus Ratio = Bonus Shares ÷ Original Shares (e.g., 0.5 = 1:2)
10. Is a 2:5 ratio better than 1:3?
It depends on the context and total shares — 2:5 is equivalent to 40%, while 1:3 is ~33.3%.
11. Do I need to pay tax on bonus shares?
They are not taxed at receipt, but capital gains may apply when sold.
12. Can fractional ratios exist?
Yes — like 3:7, which means 3 shares for every 7 held.
13. Can a company issue multiple bonus rounds?
Yes — but each must be approved and announced formally.
14. How are record dates related?
Only shareholders as of the record date are eligible for bonus shares.
15. Are bonus and split the same?
No — bonus gives extra shares; split divides each share into smaller units.
16. Can mutual fund units be given as bonus?
Yes — bonus units can be issued in mutual funds too.
17. What’s the effect on EPS?
EPS (Earnings Per Share) usually drops after a bonus issue due to increased shares.
18. Is the ratio visible in my brokerage account?
Usually — brokers update shareholding and note the bonus adjustment.
19. Do bonus shares affect dividend income?
Yes — more shares mean potential for more dividends, if paid per share.
20. Can I calculate this for past records?
Absolutely — as long as you know the original and bonus shares issued.
Conclusion
The Bonus Shares Ratio Calculator makes it easy to determine the exact share ratio issued in a corporate bonus announcement. Whether you’re an investor verifying your entitlement or an analyst reviewing company actions, this tool provides fast, accurate results that simplify your understanding of bonus distributions.
Use it anytime to get a clear view of how your shareholding evolves through bonus issues and ensure your investment records stay up to date.