Companies have begun rewarding investors through bonus issues and stock splits. As many as 12 companies have walked this path in the last six months, with five of them making such announcements in the last one month.

Berger Paints announced an issue of bonus shares in the ratio of one share for every two shares held on March 8. And now the board proposes to meet on March 17 to consider a stock split.

Premier Instruments, Suparajit Engineering, Unichem Laboratories and Wochardt too propose to issue bonus shares and also split the face value of their shares on the same day.

The Wockhardt board has recommended one bonus share for every two shares held and the sub-division of equity shares of Rs 10 each paid up into two shares of Rs 5 each.

Suparajit Engineering has declared a 1:1 bonus and a split in the face value of equity shares from Rs 10 paid-up to Rs 5 paid-up. Unichem Laboratories has proposed a 1:1 bonus and a stock split (from Rs 10 to Rs 5).

Bonus shares basically reward existing shareholders. Stock splits typically reduce the value of the share to the extent of the split, thereby making even high-priced stocks accessible to retail investors. In both the cases, the number of shares increases in the ratio of the bonus and stock split.

The markets have cheered such corporate generosity. These five companies are currently quoting at historic highs on the Bombay Stock Exchange (BSE).

In last two months, the market price of these stocks increased by between 16 per cent and 70 per cent on the BSE.

The Unichem Laboratories stock price appreciated by 76 per cent, from Rs 384.65 on January 8 to Rs 675.40 on March 12. The Premier Instruments scrip appreciated 23 per cent, from Rs 432.15 to Rs 531.

Earlier, in last six months, Emami and Soundcraft Industries split their equity shares from Rs 10 to Rs 2 paid-up, each. FDC, LG Balkrishna and MIRC Electronics sub-divided their shares from Rs 10 to Re 1, while Jubilant Organosys split its shares from Rs 10 to Rs 5 paid up.

After the sub-division of shares, Emami, FDC, LG Balkrishna and MIRC electronic allotted bonus shares in the ratio of 1:1 in each case, Soundcraft Industries allotted two equity shares for every one share held and Jubilant Organosys allotted three shares for every five shares held by existing shareholders on the record date.