A unique opportunity is just a few days ahead but to grab it we haveto apply our sense. As per our past experience in stock market, we hadbeen seeing that if bonus is 1:1 than price is reduced to 50%, ifbonus is 1:2 than price is reduced to 33%. So on the same pattern, inrel power 3:5 bonus, price should be reduced to 5/8x100=62.5% , but itis not so in case of Rel Power. Dear all in all historical bonusexcept in Rel power, this bonus ratio is applied to Total Shares ofcompany Including Promoter. Anyone can check in bonus history that ifbonus is 1:1, than on ex date total shares of company become double soprice adjusted to 50%.
Take a example that if a company have 100 crore share, price of eachis 1000, so total market capital of company is 100x1000=1,00, 000 (1lack ) crore. Suppose bonus is issued 1:1 ratio than on ex date in themarket total shares are 200 crore, if we apply our sense than it isdefinitely not possible that with same price 200x1000= 2,00,000 (2lack crore) just over one night, So on ex date price will be 500 andmarket capital is same 200x500=1,00, 000 (1 lack) crore. Onlydifference is that before bonus company has liability of 100 croreshare of face value 10 each, so total face value(called as Paid upcapital) is 100x10=1000 crore. If company announce bonus of 1:1, thanface value (paid up capital) 200x10=2000 crore. Dividend is given onface value, if company announce dividend of 20% before bonus, thancompany liability is 1000x20/100= 200 crore dividend, And if companyannounce same dividens after bonus company has liability of2000x20/100= 400 crore.
So practically after bonus total market capital of company remain samebut total face value is increased proportionally and we get moredividend if announced after bonus.
Now come to Rel power. Here total share are 226 crore before bonus(anyone can check at NSE site). So paid up capital is 226x10(facevalue)=2260 crore . Bonus is 3:5 for non-promoter only(which arehaving only 22.8 crore share out of 226 crore), so after bonus totalshare are not 226x8/5=361. 6 crore but 203.2 crore(promoter) + 22.8(nonpromoter) + 22.8x3/5(=13. 68)(bonus) = 239.7 crore total. Plz gothrough 25.02.08 Rel Power NSE announcement on second page 17th line,that paid up equity shares are increase to 239.7 crore.
So, before bonus and after bonus company capital should be same(if nobig fall in market on ex date). Currently Rel power is quoting around400, so total market capital is 226 crore x 400=90,400 crore. Afterbonus total share are 239.7 crore, so keeping the same market capitalreduced price is 90,400/239.7= 377 which in other way 400x226/239. 7=377. Here scene is that Only 10% non promoter are given bonus and out of10% non promoter, if we leave FII, DII etc general public( retailinvestor, HNI )are 4.28%. And this 4.28% common public is unable todigest this opportunity that how 400x5=2000 can be 377x8=3016 just infew days. Did anyone see that FII, DII(MF) are crying on this issue,they are waiting for the opportunity when this common public willrelease their bonus share (which they are unable to digest) on ex dateat lower price and they will grab it. Dear investor compare the priceon the basis of total market capital before and after bonus. Some bigfish will try to low the price on and after ex date to compel smallinvestor to release their stake. Many are creating panic in marketthat ex bonus price will be around 300 or even less Than think in waythat 239.7 crore x 300=71,910 crore market capital. Did Anil announcebonus that company which was of 90,000 crore would become of 70,000crore. Believe on him he will take care for that but u all have tokeep patience for some time. Controlling price is also in public hand,if we all don't sell on ex date how price will come down, than onlyFII and DII will left and they are enough sensing the situation.
If u all can wait for three-six month than price will come around 500as project progress happen than imagine 400x5=2000 will be 500x8=4000,100% return in around 4 month. So don't think of selling but digestthe opportunity with sense(total market capital of company before andafter bonus). Best of luck.
Source: Internet
