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What is a bonus share?

A bonus share is a free share a company issues to existing shareholders out of its profits or reserves, stated as a percentage of what you hold — a 10% bonus gives 10 new shares for every 100. The market price is adjusted down by the same proportion, so your total value doesn't change on the day.

Recent bonus & right price adjustments

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How a bonus issue works

  1. The board proposes a bonus percentage; the AGM must approve it.
  2. Shareholders on the register at the book-closure date are entitled.
  3. After approval and listing, the bonus units are credited to your demat account.

Price adjustment

Adjusted price = Price before book closure ÷ (1 + Bonus %)

Example: a Rs 550 share with a 10% bonus adjusts to 550 ÷ 1.10 = Rs 500. 100 shares × Rs 550 and 110 shares × Rs 500 are both Rs 55,000.

Tax on bonus shares

Bonus shares are taxed at 5% of their face value (Rs 100 per share). When a cash dividend is declared alongside, the tax is usually deducted from it; otherwise you pay it before the units are credited. Meroshare takes bonus units at Rs 100 each when it works out your average purchase cost (WACC).

Is a bonus share good for investors?

It doesn't create value on its own — the price adjusts. It matters because the company kept profit in the business instead of paying cash, and the extra shares earn future dividends.

What does a 1:1 or 100% bonus mean?

One new share for every share held: 100 shares become 200, and the price roughly halves.

Updated 27 October 2026. General information, not investment advice. Rules can change — check the latest NEPSE, CDSC or SEBON notice. Editorial policy · More NEPSE guides