Nestlé India, the beloved maker of Maggi, Nescafé, KitKat, and more, is turning heads on June 26, 2025. Why? The company’s board approved a historic 1:1 bonus share issuance—meaning eligible shareholders will double their holdings! This corporate action, unprecedented in nearly three decades, has already sent the stock price rising 1–1.6 % on the day of the announcement.
What’s Going On?
Nestlé India convened its board today—on June 26, 2025—to greenlight the bonus share plan, reflecting its commitment to sharing profits while maintaining a strong cash balance. The security trading window has been closed since June 19 to comply with insider trading regulations, reopening on June 28.
Why It Matters
- First-ever bonus issue in nearly 30 years: The last one was in 1996 (1:2 ratio), making this a “sweet treat” for long-term investors.
- Shareholder-friendly move: By issuing free shares, Nestlé India boosts liquidity and makes it easier for retail investors to buy in.
- Valuation signal: A bonus issue often shows confidence in future growth prospects and a financially healthy balance sheet.
Market Reaction So Far
Anticipation built quickly—on June 20, the share price rose about 1.6 %, hitting ~₹2,356 on the BSE. Today, following the approval, it gained another ~1 %. Over the past year, returns were flat to mildly positive, but today’s move adds momentum.
Context: Why Now?
- Strong Q4 FY25 performance: While net profit eased ~5 % YoY to ₹885 crore, revenue grew ~4.5 % to ₹5,504 crore—beating estimates.
- Retail reach expansion: Brands like Nescafé saw double-digit growth in households, and beverages and confectionery segments performed well .
- Recent stock split: In January 2024, Nestlé did a 1:10 stock split—this bonus follows a similar strategy to improve affordability and enhance liquidity.
What’s Next?
- Record date & ratio specifics: While the 1:1 ratio is confirmed, the final record date is awaited—this date determines who qualifies.
- Post-bonus performance: Watch for valuation shifts (e.g., P/E ratio adjustments), fresh analyst recommendations, and trading volume changes.
- Dividend impact: Nestlé India recently declared a ₹10/share dividend for FY25, adding to strong shareholder returns.