EVALUATING THE IMPACT OF BONUS SHARES ON STOCK PRICE PERFORMANCE IN THE INDIAN CAPITAL MARKET

Abstract

This study investigates the impact of bonus share announcements on stock price performance in the Indian capital market. Bonus shares, often used by companies to signal financial strength and retain investor interest, have been widely debated in terms of their actual effect on shareholder value. Using empirical analysis of stock price movements before and after bonus share announcements, this study evaluates whether bonus issues result in abnormal stock returns. Data from selected companies listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) were analyzed over a fiveyear period. The findings reveal a short-term positive impact on stock prices around the announcement date, but no significant longterm effect. This research contributes to the understanding of market behavior toward bonus issues and offers practical insights for investors and policymakers