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This auto component maker announced 1:2 bonus for the 11th time in its history: Check how much wealth shareholders have created
4 min read | Updated on May 30, 2025, 10:32 IST
SUMMARY
Samvardhana Motherson International announced a 1:2 bonus issue yesterday. Since 1997, the company has issued 11 bonus shares in a consistent 1:2 ratio. If the proposed bonus receives shareholder approval, an initial investment of 100 shares could potentially grow to 8,614 shares. This highlights the significant wealth creation potential for long-term investors through bonus shares.
Stock list
The investor who bought 100 shares before the 1997 bonus issue will have 8,614 shares post the upcoming bonus.
Samvardhana Motherson International (SMIL) announced its fourth quarter results on May 29. But, the auto component maker is in the news not for its earnings but for recommending a 1:2 bonus issue. This is the 11th bonus given out by the company to its shareholders.
The company has consistently rewarded its investors with bonus issues and dividends over the last three decades. It is among the stocks with the highest number of bonus issues. Along with this, the company has reported strong revenue growth and profitability, which reflects the company's robust fundamentals.
Samvardhana Motherson's bonus history
Samvardhana Motherson is engaged in the manufacturing and sale of auto components to original equipment manufacturers (OEMs). The company supplies components to a diverse range of domestic and international automakers. Volkswagen, Mercedes Benz, Audi, Maruti Suzuki, Honda Cars, Porsche are some of its key clients.
The company paid its first bonus issue in a 1:2 ratio (one bonus share for every two shares held) in 1997. In all 11 instances, the company has maintained a bonus ratio of 1:2. This remarkable cadence of bonuses has significantly compounded shareholder value.
| Bonus announcement | Bonus ratio | Ex-date | Record date | No. of shares after bonus |
|---|---|---|---|---|
| 29 May, 2025 | 1:2 | - | - | 8614 |
| 16 Aug, 2022 | 1:2 | 03 Oct, 2022 | 05 Oct 2022 | 5743 |
| 07 Sep, 2018 | 1:2 | 30 Oct, 2018 | 31 Oct 2018 | 3829 |
| 19 May, 2017 | 1:2 | 05 Jul, 2017 | - | 2553 |
| 10 Jun, 2015 | 1:2 | 23 Jul, 2015 | - | 1702 |
| 01 Nov, 2013 | 1:2 | 20 Dec, 2013 | - | 1135 |
| 09 Aug, 2012 | 1:2 | 03 Oct, 2012 | - | 757 |
| 26 May, 2007 | 1:2 | 30 Aug, 2007 | 31 Aug 2007 | 505 |
| 07 Jan, 2005 | 1:2 | 24 Feb, 2005 | 26 Feb 2005 | 337 |
| 21 Jul, 2000 | 1:2 | 15 Nov, 2000 | 30 Nov 2000 | 225 |
| 27 Nov, 1997 | 1:2 | 01 Dec, 1997 | - | 150 |
Wealth creation analysis
As we can observe from the above tables, investors who bought 100 shares before the 1997 bonus issue would theoretically hold around 8,614 shares post the upcoming bonus, excluding the share price appreciation, dividends and splits. This shows potential for wealth creation through bonus shares for long-term investors.
Recent stock performance and Q4 earnings
The company stock is trading around ₹157 as of 9:30 am on NSE today, up over 3%, with a market cap of ₹1.10 lakh crore and a P/E of around 29. So far this year, Samvardhana Motherson shares have remained flat. However, the stock has rallied over 18% this month. Recent gains indicate renewed investor confidence in the company.
Q4 FY25 Financial Highlights
- Revenue grew 6% YoY to ₹29,317 crore
- Profit After Tax (PAT) declined 23% YoY to ₹1,051 crore.
- EBITDA declined by 10% YoY, with margins narrowing by 70 basis points.
- For the full fiscal year, revenue stood at ₹113,663 crore, up 15% YoY, while net profit was at ₹3,803 crore, up 40% YoY
- Capital expenditure for FY25 was ₹4,433 crore, aimed at growth in emerging markets and non-automotive segments.
Samvardhana Motherson’s remarkable history of bonus issues, combined with its resilient financial performance, makes it a compelling case for investors who value long-term wealth creation alongside stable earnings growth. The upcoming bonus issue further exemplifies the company's shareholder-friendly approach.
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