Bonus issue

Free additional shares issued to existing holders, funded by converting reserves into share capital.

In a one-for-one bonus, a 50 crore share count doubles to 100 crore. Each holder owns twice as many shares of half the value, and their stake is unchanged.

Nothing economic happens. The company's assets, profits and prospects are identical the day after, and the only real effects are cosmetic: a lower price per share, more liquidity, and a signal that management is confident enough to capitalise reserves permanently.

Face value stays the same in a bonus and share capital rises. That's what distinguishes it in the accounts from a split.

A bonus isn't a dividend. No cash leaves.

Its one real consequence is on the balance sheet. Capitalising reserves is permanent and reduces what can later be distributed as dividend, so a board doing it is saying it doesn't expect to need that portion of accumulated profit. That's a mild signal of confidence, and the only signal the action carries.