On July 16, 2025, investors were stunned to see Ashok Leyland shares tumble by nearly 51% from ₹250.85 to ₹123.95. However, this apparent crash was not due to negative market sentiment or poor performance. Instead, it was a result of the company’s 1:1 bonus share issuance. Let’s dive into the full details, what it means for investors, and how this impacts shareholding and trading.
What Actually Happened?
The Headline:
Ashok Leyland’s share price dropped from ₹250.85 to ₹123.95 — a fall of 50.6%.
The Reason:
The drop corresponds directly with the stock becoming ex-bonus after the company declared a 1:1 bonus share issue.
Ex-Bonus Date:
Wednesday, July 16, 2025
Record Date:
Also Wednesday, July 16, 2025
⚠️ Important: A bonus issue does not reduce shareholder value. It only increases the number of shares while reducing the price per share proportionately.
A bonus share is a free additional share given to existing shareholders. It’s issued from the company’s reserves. The main idea is to reward existing investors without impacting the total value of their investment.
Bonus Issue Details:
| Particulars | Details |
| Type | Bonus Share |
| Ratio | 1:1 (One bonus share for every one held) |
| Record Date | July 16, 2025 |
| Deemed Allotment Date | July 17, 2025 |
| Trading of Bonus Shares Starts | July 18, 2025 |
| Previous Bonus Issue | 2011 |
Stock Price Movement: Before & After Bonus
Here’s a breakdown of the stock price and how it adjusted after the bonus:
| Date | Share Price (₹) | Event |
| July 15, 2025 | ₹250.85 | Pre-Bonus Close |
| July 16, 2025 | ₹123.95 | Ex-Bonus Opening |
| % Change | -50.6% | Due to bonus |
So, while the per-share price fell, investors now own double the number of shares. The total value of their investment remains unchanged.
Example: How This Affects Investors
Let’s consider a real-life example to understand the impact better:
| Before Bonus | After Bonus |
| Shares Held: 20 | Shares Held: 40 |
| Price/Share: ₹200 | Price/Share: ₹100 |
| Total Value: ₹4,000 | Total Value: ₹4,000 |
As shown above, while each share’s price gets halved, the number of shares doubles — hence no loss in total value.
Important Dates to Remember
| Event | Date |
| Bonus Approval by Shareholders | July 7, 2025 |
| Record Date | July 16, 2025 |
| Deemed Allotment of Bonus Shares | July 17, 2025 |
| Trading of Bonus Shares Begins | July 18, 2025 |
What Does “Ex-Bonus” Mean?
When a stock starts trading ex-bonus, it means new buyers are not eligible for the upcoming bonus. Only those who held the stock before the ex-bonus date (July 16) are eligible to receive the bonus shares.
Statement from Ashok Leyland
Ashok Leyland confirmed the issuance in a filing:
“This is further to our intimation dated July 7, 2025, informing the shareholders’ approval for the issue of bonus shares in the ratio of 1:1… The deemed date of allotment of bonus shares shall be Thursday, July 17, 2025, and these bonus shares will be made available for trading on the next working day of allotment, i.e., Friday, July 18, 2025.”
As of March 2025, the company had a significant retail investor base:
| Shareholder Category | Figures |
| Retail Shareholders | 14.2 lakh |
| % Shareholding by Retail | 9.38% |
| Capital Held by Retail Investors | Up to ₹2 lakh each |
All these shareholders, if they held shares as of July 16, are eligible for the bonus.
Here are some reasons why companies like Ashok Leyland opt for a bonus issue:
✅ Enhance Liquidity
Lower per-share price makes the stock more affordable and attractive to small investors.
Bonus issues serve as a gesture of goodwill and confidence in the company’s performance.
✅ Increase Public Participation
Affordable pricing may result in broader market participation and higher trading volumes.
Market Sentiment and Clarification
While the share price drop may have startled investors, market experts quickly clarified that this was a technical adjustment.
No market panic or fundamental problem was responsible.
Analyst View
According to brokerage houses and analysts, Ashok Leyland’s fundamentals remain strong, and the bonus issue is a positive move.
Here are two expert stock recommendations from ETMarkets:
| Stock | Recommendation | Target Price (₹) | Current Price (₹) | Brokerage |
| Happiest Minds | Buy | 790 | 635.90 | Anand Rathi |
| Tata Motors | Outperform | 830 | 674.40 | BNP Paribas Securities |
Final Thoughts
While a 51% crash in share price might trigger alarms, this one was a mathematical adjustment, not a crash. With the bonus share issuance, investor wealth remains fully intact, and long-term shareholders actually benefit from increased liquidity and trust in the brand.
Key Takeaway: If you held Ashok Leyland shares before July 16, you are eligible for double the number of shares, even though the price per share is halved. Your total investment value does not change.
Summary Table
| Particular | Detail |
| Company | Ashok Leyland |
| Event | 1:1 Bonus Share Issue |
| Date of Price Drop | July 16, 2025 |
| Share Price Movement | ₹250.85 → ₹123.95 (due to bonus) |
| Record Date | July 16, 2025 |
| Deemed Allotment Date | July 17, 2025 |
| Bonus Shares Trading Date | July 18, 2025 |
| Impact on Value | No change in total investment |
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