FINANCE & STOCK ADVICE: BONUS SHARE / BONUS ALLOTMENT MEANING

Some times it is generally misconcepted by the share holder that allotment of bonus say in ratio 1:1 means that’s the number of the shares get doubled with the same price thereby doubling there stock value making 100% gain.This concept is hundred percent wrong t , forget that you can get 100% gain overnight.The basic concept is that when a company makes a profit it doesn’t distribute the entire portion of profit in form of dividend but keep reserving a part of profit every year for future needs of the company. That part of reserve is kept under liability head as “reserve & surplus” when there is need of capital or fund in the company for development , acquisition , new unit , research work etc the company instead of taking loan from the market they transfer the reserve to capital account whereby the equity get raised with same value so in such case the number of shares are increased in the ratio as the capital is increased and such increase in the number of shares will lead to bonus share allotment there is nothing that the company has got profit to doubalise your holding so only the no. of share held is doubled or increased in the ratio as bonus allotment. So as the number of share get increased in the ratio of bonus allotment but the price get reduced in the same ratio thereby making the total stock value same as before. The only profit of bonus issue is that when bonus allotment news is flashed the price of the stock soar as the company is going to do something positive for which the transfer of reserve to capital is done and that is the only gain a shareholder gain by bonus issue.

MULTI BAGGER STOCK GROUP

Some of my group's multi bagger picks during the rally were NMDC , MMTC , STC , Larsen ,Jindal Steel & Power , Unitech , BF Utilities , Jai Corporation , Walchand Nagar Industries, RNRL , Reliance Infra (Reliance Energy) etc.

I had been long associated with a corporate engaged in financial services , where with the assistance of specialized tools along with my special analysis as per some historical accepted theories of stock market like W. D. GANN's Theory , Elliot Wave Theory and others are used with reliable insider information of so called " operators" who play a major role to make a stock ,a Multi Bagger ,I do make my gem picks in this market.

I had been running my group , where the associated people get the reliable and most beneficial to get the unexpected return as seen in the above mentioned tips. Say for example the stock called MMTC had jumped from 2000 level to 56000 per share of historical price where the capital appreciated by 28 times in very short period with 2700% return on capital employed. Likewise in RNRL we started accumulating at RS 25 level from where we saw it moving at 250 level giving 10 times with 900% return.

These sort of return is helpful as ,

1. Handsome gain will make a jack to our capital.

2. Limited stocks trade , as daily trade could be avoided , which is more risky.

3. Long term capital gain , so no tax liability.

4. Whole income in white, which could be further deposited into fixed deposit to get assured monthly income later.

5. Strong income tax file without paying any taxes.

Our role here could be summarized as :

1. Giving tips to all registered member at proper time , when the stock is just about to take off, neither too early not too late.

2. Make sure investor do not gt stuck into it.

3. Recommend to exit when the operator is about to leave it.which is the most important work or else the whole accumulated and deemed profit will be washed away along with part of investment and will remain stuck for long - long period.


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BONUS SHARE / BONUS ALLOTMENT MEANING