Reliance Industries offers 1:1 bonus, interim of Rs 13

Reliance Industries Ltd sprang a pleasant surprise on Wednesday, announcing a 1:1 bonus share issue, the first time in 12 years. All shareholders will get one free share for every share held by them. Around 35 lakh shareholders will benefit from, what is being termed a ‘Diwali bonus’. The last bonus issue (also 1:1) by RIL was in 1997. 
 
The RIL board also proposed an interim dividend of Rs 13 per share for 2008-09. The dividend will entail an outgo of Rs 2,219 crore, including Rs 322 crore in taxes. The shareholders of Reliance Petroleum Ltd, which was recently amalgamated with RIL, will also get the same bonus and interim dividend. Since the demerger of the group, RIL has created value of Rs 247,000 crore in market capitalisation. Shareholders have earned a 40-per cent compounded return.
 
RIL is now ready to invest for the future. It has a strong balance-sheet, large cash reserves and substantial financial flexibility, owing to its Treasury stock holdings, which have a current value of nearly Rs 40,000 crore. The company recently sold 1.5 crore treasury shares worth Rs 3,188 crore.