Explained: Motherson Sumi, Samvardhana Motherson didn't crash 32%. Bonus issue explains sharp price drop
Samvardhana Motherson International
and
Motherson Sumi
Wiring appeared to plunge over 32% in early trade on Friday, July 18, showing sharply lower prices in investor demat accounts. But the steep drop was not a market rout, it was a technical adjustment following the companies' 1:2
bonus issue
s that took effect today, with stock prices recalibrating accordingly and no impact on the overall value of shareholder holdings.
Samvardhana Motherson's bonus issue
Samvardhana Motherson shares began trading ex-bonus on Friday following the company's 1:2 bonus issue, its 11th such issue in the last three decades. Shareholders will receive one bonus share for every two shares held as of the record date, which was set for July 18. The last day to buy the shares and remain eligible was Thursday, July 17.
Explore courses from Top Institutes in
Select a Course Category
CXO
Management
Degree
Digital Marketing
MBA
healthcare
Data Science
PGDM
Design Thinking
Others
Data Science
Leadership
Artificial Intelligence
Cybersecurity
Technology
Healthcare
Operations Management
Finance
Product Management
Data Analytics
others
Public Policy
Project Management
MCA
Skills you'll gain:
Technology Strategy & Innovation
Emerging Technologies & Digital Transformation
Leadership in Technology Management
Cybersecurity & Risk Management
Duration:
24 Weeks
Indian School of Business
ISB Chief Technology Officer
Starts on
Jun 28, 2024
Get Details
Skills you'll gain:
Customer-Centricity & Brand Strategy
Product Marketing, Distribution, & Analytics
Digital Strategies & Innovation Skills
Leadership Insights & AI Integration Expertise
Duration:
10 Months
IIM Kozhikode
IIMK Chief Marketing and Growth Officer
Starts on
Apr 7, 2024
Get Details
Skills you'll gain:
Operations Strategy for Business Excellence
Organizational Transformation
Corporate Communication & Crisis Management
Capstone Project Presentation
Duration:
11 Months
IIM Lucknow
Chief Operations Officer Programme
Starts on
Jun 30, 2024
Get Details
Skills you'll gain:
Digital Strategy Development Expertise
Emerging Technologies & Digital Trends
Data-driven Decision Making
Leadership in the Digital Age
Duration:
40 Weeks
Indian School of Business
ISB Chief Digital Officer
Starts on
Jun 30, 2024
Get Details
For example, an investor holding 200 shares will be allotted 100
bonus shares
, increasing the total number of shares held to 300, with the per-share price adjusting proportionately.
On Thursday, July 17, the Samvardhana Motherson stock had closed at Rs 153.85 on the BSE. On Friday morning, it opened at Rs 104.65, a decline of around 32% on paper, reflecting the bonus adjustment. The stock was trading 0.3% higher by mid-morning.
This marks the 10th bonus issuance by Samvardhana Motherson since November 2000.
Live Events
First bonus since demerger for Motherson Sumi Wiring
Motherson Sumi Wiring, the demerged entity of Samvardhana Motherson, also implemented a 1:2 bonus issue, its first since listing. The record date was also July 18.
Shares of Motherson Sumi Wiring closed at Rs 64.40 on Thursday and opened at Rs 43.70 on Friday, implying a 32% decline on paper, again, a direct outcome of the bonus adjustment. The stock was up 2.5% in early trade.
The bonus ratio entitles shareholders to one bonus share for every two shares held. For instance, an investor with 100 shares will receive 50 bonus shares, increasing their total holdings to 150.
No change in investment value
Although the per-share price appears to have dropped significantly on paper, investors have not lost any value. The total worth of their holdings remains unchanged as the number of shares increases to offset the reduced price.
For example, a shareholder holding 300 shares of Motherson Sumi Wiring at Rs 60 apiece, a total value of Rs 18,000, will now hold 450 shares priced at approximately Rs 40 each, maintaining the same overall investment value.
Also read |
Motherson Sumi, Samvardhana Motherson International shares rise up to 4% on bonus share issue record date
Bonus shares to be credited next week
Both companies have announced that the deemed date of allotment for the bonus shares will be Monday, July 21. These bonus shares will be made available for trading on the next working day, i.e., Tuesday, July 22.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
41 minutes ago
- Time of India
Good if US trade pact sealed by August 1, but nation first: Piyush Goyal
Commerce and industry minister Piyush Goyal on Sunday said it would be good if India and the US can do a trade agreement before August 1 but New Delhi's priority is to protect its national and public interests. "Koi deadline ke hisab se Bharat negotiate nahi karta (India doesn't negotiate its trade agreements based on deadlines)," Goyal added at an event in Mumbai on the opportunities for exports in the UK market following the bilateral free trade agreement. Explore courses from Top Institutes in Please select course: Select a Course Category Product Management Management Healthcare Data Analytics Data Science healthcare Design Thinking Public Policy Leadership Degree Operations Management Digital Marketing PGDM Artificial Intelligence Data Science Technology Others CXO Project Management Finance Cybersecurity MBA others MCA Skills you'll gain: Product Strategy & Roadmapping User-Centric Product Design Agile Product Development Market Analysis & Product Launch Duration: 24 Weeks Indian School of Business Professional Certificate in Product Management Starts on Jun 26, 2024 Get Details Skills you'll gain: Product Strategy & Competitive Advantage Tactics Product Development Processes & Market Orientations Product Analytics & Data-Driven Decision Making Agile Development, Design Thinking, & Product Leadership Duration: 40 Weeks IIM Kozhikode Professional Certificate in Product Management Starts on Jun 26, 2024 Get Details Skills you'll gain: Creating Effective Product Roadmap User Research & Translating it to Product Design Key Metrics via Product Analytics Hand-On Projects Using Cutting Edge Tools Duration: 12 Weeks Indian School of Business ISB Product Management Starts on May 14, 2024 Get Details He was responding to a question about the August 1 deadline when the US' reciprocal tariffs imposed on most countries, including India, are expected to come into force. The minister said the talks are going well with the US and India will do a good bilateral trade agreement (BTA) by October-November. American trade negotiators are slated to visit India in August for the next round of negotiations for the proposed BTA, the first tranche of which is aimed to be concluded by October. The fifth round of talks concluded in Washington last week. The countries aim to more than double bilateral trade to $500 billion. The two sides were working to finalise an interim trade deal before August 1. "Our discussions with the United States are progressing very well. I am fully confident that by the October-November 2025 timeline, we will secure a good agreement," Goyal said. This was his first outreach programme with industry after the India-UK Comprehensive Economic and Trade Agreement (CETA) was signed on July 24. Exporters from gems and jewellery and marine sectors, among others, participated in the event. "It is the most comprehensive free trade agreement India has ever entered with 30 chapters, including environment, gender, anti-corruption," Goyal said about CETA. "It has so many positives and new things that today the world wants to do business with India." He said India is in the process of finalising trade agreements with developed countries with whom it doesn't compete but complement. Whether it is New Zealand, Oman, the US, or the EU, India's agreements will be made with a "well-thought-out strategy" as the country negotiates from a position of strength and confidence, the minister said. He alleged that the previous UPA government had left Indian trade, farmers and fishermen to the mercy of a non-market economy by its move to join the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between Asean countries and China, Japan, South Korea, Australia and New Zealand.
New Indian Express
an hour ago
- New Indian Express
Best ways to invest in gold that hit record highs in H1
Gold, which has never ceased to be the safe-haven asset so far, has gained 26% in the first half of 2025 becoming one of the top-performing major asset classes. The precious metal has scaled 26 new all-time highs during this period in global markets—including once crossing the sensitive Rs 1 lakh/10 grams mark in the domestic markets when the metal crossed $3,500/ounce-mark in the third week of April. This 26 new life-time highs came in after breaking through a 40-new-record streaks in 2024 when it had rallied 24% over a 22% rally in the previous year. What makes the metal so alluring to investors? There are many a reason, with the shining allure it has for women as a jewellery (our households are sitting over close to 26,000 tonnes of gold in jewellery alone) and its ready fungibility/encashability when in need of ready cash being the top reasons for its allurement. Let's look at some of the best ways to invest in this metal, even though investment experts recommend allocating only a small portion (5–10%) of your portfolio to precious metals. According to the World Gold Council, a combination of a weaker US dollar, range-bound interest rates and a highly uncertain geo-economic environment has resulted in strong investment demand for gold. Another equally important driver is the continuing central bank demands led by the Reserve Bank and the central bank of China among others. The council sees at least 5% more spike in prices during the course of the year and 10-15% more if current volatile economic conditions deteriorate further exacerbating stagflationary pressures—that's the metal reaching $3,840/ounce by end December and translating into an annual return of 40%. But many Wall Street watchers have predicted the metal hitting the $4,000/ounce mark by December. Experts recommend allocating only a small portion, say 5–10% of your investment portfolio to precious metals, including silver and the following are the best ways to take exposure to this metal. The easiest way is investing in sovereign gold bonds (SGBs) launched in 2015, but since last year the SGBs have been discontinued. Starting 2015, the RBI had launched 67 SGB tranches-- each being an eight-year instrument with a five-year lock-in--issuing 14.7 crore units. They were listed and traded in the cash segment of the BSE and the NSE and investors could buy and sell them through demat accounts. Gold Exchange Traded Funds (ETFs) Given that no new SGBs are being issued, the best option available to own non-physical gold is to go in for gold ETFs which track the domestic physical prices of the metal. Each gold ETF unit represents the physical gold and is based on gold prices and invest in physical bullion. One gold ETF unit equals 1 gram of gold, backed by high-purity physical metal. Why ETFs? Because they are safe and have higher liquidity as they are listed and are traded every day. Though, there are brokerage charges they are way less than the making charges on physical jewellery. The expense ratio in gold ETFs is also lower than that of gold MFs. On the negative side, since ETFs track the price of gold, they are subject to volatility. To invest in an ETF, one needs to have a demat account. There are entry and exit loads and the investor has to pay brokerage every time. Gold Mutual Funds Gold mutual funds are open-ended funds that invest in the units of a gold ETF with the ultimate goal of creating wealth using the potential of gold as a commodity. Gold MF units are priced differently-- in the form of net asset value disclosed at the end of the trading session—as opposed to gold ETFs which are linked to physical prices. Since gold MFs are actively managed, they have the potential to outperform the metal price over time. They also offer the convenience of investing through a fund house. On the negatives, gold MFs take a higher expense ratio than ETFs, typically around 1-2% apart from the risk of underperformance-- the return can be lower than gold price over time. In comparison to gold ETFs, gold MFs have low minimum investment requirements, making them more accessible for retail investors. Also, you don't need a demat account to invest in this form of gold.
Time of India
2 hours ago
- Time of India
Bhopal metro's priority corridor may be ready for transport by October: CM Yadav
Madhya Pradesh Chief Minister Mohan Yadav inspected the under-construction Bhopal Metro on Sunday and expressed hope that the priority corridor from Subhash Nagar to AIIMS will become operational by October this year. Yadav took a test ride on a three-coach metro train from Subhash Nagar station to AIIMS and from AIIMS to Rani Kamalapati station. He reviewed onboard features and facilities. Explore courses from Top Institutes in Please select course: Select a Course Category Digital Marketing Design Thinking Artificial Intelligence Healthcare Data Science Cybersecurity Data Analytics Product Management CXO PGDM Others Technology Finance Management others Operations Management Degree healthcare Data Science MCA Project Management Public Policy MBA Leadership Skills you'll gain: Digital Marketing Strategies Customer Journey Mapping Paid Advertising Campaign Management Emerging Technologies in Digital Marketing Duration: 12 Weeks Indian School of Business Digital Marketing and Analytics Starts on May 14, 2024 Get Details Skills you'll gain: Digital Marketing Strategy Search Engine Optimization (SEO) & Content Marketing Social Media Marketing & Advertising Data Analytics & Measurement Duration: 24 Weeks Indian School of Business Professional Certificate Programme in Digital Marketing Starts on Jun 26, 2024 Get Details "The Bhopal metro project is progressing rapidly. A few incomplete works will be completed within one and a half to two months. The government is working swiftly to give a gift of metro train service to people by October," he told reporters while pointing out that metro train service in Indore has received a positive response. He said the test run of the Bhopal metro is underway, and the Research Designs and Standards Organisation (RDSO) has completed the inspection. "The Commissioner of Metro Rail Safety (CMRS) will soon inspect the metro works. Once the CMRS gives clearance, the priority corridor of the Bhopal Metro will be opened for public transport," he added. Live Events Yadav stated that the Bhopal metro project is being developed at an estimated cost of Rs 6,941.40 crore. The priority corridor from Subhash Nagar to AIIMS is being built at a cost of approximately Rs 2,225 crore and is nearing completion. "Our target is to start metro operations on this priority corridor by October 2025. The roadmap aims to fully operationalise both corridors- orange and blue lines- before 2030," he said. Yadav said the design speed of the Bhopal Metro is 90 kmph, with an operational speed of 40 to 60 kmph. A total of 27 state-of-the-art metro train sets have been planned for the metro project, out of which seven have already arrived in the state capital. The metro will not only ensure convenient travel but also contribute effectively to environmental protection and pollution control, he added. Sharing updates on the Indore metro , Yadav said the government aims to start the full section from Super Corridor to Malviya Nagar (Radisson) intersection by the end of this year. Under the guidance of Prime Minister Narendra Modi, the state government is moving quickly to enhance civic amenities, the chief minister added. Economic Times WhatsApp channel )
