The stock of HDFC Bank went ex-bonus following its 1:1 issuance, therefore Tuesday’s seeming 62% decrease was really a mechanical adjustment. Without affecting the bank’s market capitalization or shareholder value, the bonus shares improve liquidity and retail access.
HDFC Bank Bonus Issue Explained: Why Shares Seemingly Dropped 62% on NSE
Following the execution of its 1:1 bonus share issuance, HDFC Bank, the largest private sector lender in India by market capitalization, saw a technical adjustment in the price of its shares on Tuesday. The stock started trading ex-bonus on the NSE and BSE.
Enhancing stock liquidity and increasing retail participation were the goals of the bonus issue, which entitles owners to one extra equity share for each current share owned.
Instead of a drop in the bank’s intrinsic value, HDFC Bank’s stock started 62% lower than the previous closing price, trading in the range of Rs 982.20-986.30, as a mathematical result of the bonus ratio. This was because the adjusted price reflected the increased number of outstanding shares.
It should be highlighted, therefore, that neither market capitalization nor shareholder value are impacted by this corporate move. In a proportionate dilution, the price changes in accordance with the number of shares.
Why bonus shares matter?
Bonus payments are sometimes interpreted as the company’s endorsement of its long-term profitability prospects. This represents a continuance of HDFC Bank’s capital plan to maintain the stock’s accessibility to a larger pool of investors.
Important dates for Bitcoin and Indian rupees
August 26, 2025, was designated as the record date for identifying eligible stockholders. One fully paid-up equity share will be awarded to investors who held shares on this date for each share they possessed.
In order for their holdings to be reflected by the record date, market players who followed the T+1 settlement cycle had to make sure their purchases were finished by August 25.
Disclaimer: The experts’ views, opinions, ideas, and recommendations are their own. These are not Business Connect Magazine’s opinions.
FAQ on HDFC Bank Bonus Issue & Share Price
Q1. What is the HDFC Bank bonus issue ratio?
HDFC Bank announced a 1:1 bonus share issue, meaning shareholders will receive one additional share for every share they already hold.
Q2. Why did HDFC Bank share price fall by 62%?
The fall was only technical due to the ex-bonus adjustment. Since the number of shares doubled, the share price adjusted proportionately. Shareholder value and market capitalization remain the same.
Q3. What does ex-bonus date mean for HDFC Bank?
The ex-bonus date is the day when new buyers of the stock are not eligible for the bonus shares. For HDFC Bank, the stock went ex-bonus on August 26, 2025.
Q4. What was the record date for HDFC Bank bonus issue?
The record date was August 26, 2025. Shareholders holding HDFC Bank shares on this date are entitled to bonus shares.
Q5. When will the HDFC Bank bonus shares be credited to investors’ accounts?
Bonus shares are generally credited within a few days after the record date, depending on the company’s corporate action schedule and depositories.
Q6. Does the HDFC Bank bonus issue affect shareholder wealth?
No. A bonus issue does not change the overall investment value. Instead, it increases the number of shares held while reducing the per-share price proportionately.
Q7. Why does HDFC Bank issue bonus shares?
The purpose is to enhance liquidity, improve affordability for retail investors, and show confidence in the bank’s growth and profitability.
Q8. What was HDFC Bank share price after the bonus adjustment?
On ex-bonus trading day, HDFC Bank shares traded in the range of ₹982.20 – ₹986.30 compared to the pre-bonus price above ₹2,500.
Q9. What happens to HDFC Bank’s market capitalization after the bonus issue?
The market capitalization remains unchanged, as the increase in the number of shares is offset by the proportionate fall in per-share price.
Q10. How do bonus shares impact future dividends?
Since the number of shares increases, future dividends (if declared) will be distributed over a larger base of shares. Dividend per share may reduce, but overall payout remains proportionate.
Q11. Are HDFC Bank bonus shares taxable?
Bonus shares themselves are not taxed at the time of receipt. However, if investors sell them, capital gains tax applies based on the acquisition cost (which is taken as zero for bonus shares).
Q12. Is the HDFC Bank bonus issue a sign of financial strength?
Yes. Companies often issue bonus shares when they have strong reserves and want to reward shareholders without impacting cash flow. It indicates confidence in long-term growth.
Q13. How does the HDFC Bank bonus issue affect retail participation?
With a reduced per-share price, the stock becomes more affordable for small investors, which can increase participation and liquidity in the market.
Q14. What are analysts saying about HDFC Bank after the bonus issue?
Analysts see this move as a positive step to broaden investor base. The bank’s fundamentals remain strong, and the bonus issue has no negative impact on valuation.
Q15. How is HDFC Bank’s bonus issue different from a stock split?
In a bonus issue, new shares are issued from reserves.
In a stock split, existing shares are divided into smaller denominations.
Both actions reduce per-share price but differ in accounting treatment.
Q16. What is HDFC Bank’s current share price on NSE today after bonus issue?
Post-bonus, HDFC Bank shares are trading around ₹982 – ₹986 on NSE as of the first day of ex-bonus trading.
Q17. Will HDFC Bank’s EPS (Earnings Per Share) change after the bonus issue?
Yes. EPS will be proportionately lower because earnings are now divided among a larger number of shares. However, the overall profitability of the company remains unchanged.
Q18. Does issuing bonus shares dilute ownership?
No. Bonus shares are given equally to all shareholders, so the percentage ownership of each shareholder does not change.
Q19. What is the difference between face value and market value after bonus?
Face value of HDFC Bank shares remains the same (₹1 per share).
Market value adjusts downward to reflect the increased number of shares.
Q20. Did HDFC Bank issue bonus shares earlier as well?
Yes, HDFC Bank has announced bonus issues in the past too, making it a well-established practice to enhance retail participation.
Q21. Is it good to buy HDFC Bank shares after the bonus issue?
Many investors consider buying post-bonus because of the lower entry price and strong fundamentals of the bank. However, decisions should be based on personal research and risk appetite.
Q22. Do bonus shares increase liquidity in the stock market?
Yes. With more shares available for trading at a reduced per-share price, liquidity usually increases, attracting retail investors.
Q23. Can HDFC Bank’s share price rise again after the bonus adjustment?
Yes. Over time, if the bank’s business grows, the share price may increase again, just like before the bonus issue.
Q24. Are bonus shares free for investors?
Yes. Investors don’t need to pay anything. Bonus shares are issued out of the company’s accumulated reserves.
Q25. What was the HDFC Bank IPO price when it was first listed?
HDFC Bank was listed in 1995 with an IPO price of ₹40 per share, and since then it has delivered massive returns to investors.
Q26. How will Vedanta shares be impacted by HDFC Bank’s move?
Vedanta shares are independent of HDFC Bank’s corporate actions. The mention of Vedanta is likely because both are widely tracked by retail investors.
Q27. How is HDFC Bank different from HDFC Ltd now after the merger?
HDFC Ltd (the housing finance company) merged with HDFC Bank in 2023, making HDFC Bank one of the largest financial institutions in India by market cap and balance sheet.
Q28. Is HDFC Bank the only bank issuing bonus shares in 2025?
No. Several Indian companies, including banks, issue bonus shares periodically, but HDFC Bank’s 1:1 issue is one of the most high-profile in 2025.
Q29. What will happen if I sell my HDFC Bank shares before the record date?
If you sell before the record date (26th August 2025), you will not receive the bonus shares. Only those holding shares as of record date are eligible.
Q30. What should investors expect next from HDFC Bank after this bonus issue?
Analysts expect HDFC Bank to continue its focus on credit growth, retail banking expansion, and digital transformation, which could support long-term stock growth.
