Nestle India share price: Shares of fast-moving consumer goods (FMCG) maker Nestle India opened at ₹1,122 apiece on the National Stock Exchange on Friday, August 8, as against its last closing price of ₹2,234.60, signalling a 49.7% downtick over the last close. But is the stock really down by a whopping 50%?
Well, the answer is no. Today, August 8, is the record date for the 1:1 bonus share issue announced by Nestle India. This means that investors who held one share of the company of ₹1 are entitled to one more share of ₹1. The total number of shares in the market doubles, but the price per share is adjusted downward, keeping the overall value of the investment the same.
So, the 50% drop is not actually a loss in value — it’s just a mathematical price adjustment due to the bonus.
For instance, if you held 100 shares at a price of ₹100 before the bonus issue, your investment value would be ₹10,000. Now, after the bonus share allotment in a 1:1 ratio, the shares would double to ₹200, but the price would be slashed by half to ₹50, keeping the total value at ₹10,000.
So, there is no actual gain or loss — just a change in the number of shares and price per share. After the record date, the original company’s share price adjusts downward to reflect the impact of the bonus issue.
