Samvardhana Motherson International Ltd. (SMIL) is one of the world’s leading automotive component manufacturers, with a presence in over 40 countries. It caters to global OEMs and offers solutions across wiring harnesses, mirrors, polymers, lighting systems, and more.
The company has a reputation for rewarding shareholders through regular dividends and bonus issues. In 2025, Samvardhana Motherson once again made headlines by announcing a bonus share issue.
Samvardhana Motherson Bonus Shares 2025 Announcement
On May 28, 2025, Samvardhana Motherson’s Board of Directors approved the issue of bonus shares in the ratio of 1:2, meaning shareholders will receive 1 bonus share for every 2 shares held.
Motherson Key Highlights:
- Bonus Ratio: 1:2
- Record Date: June 10, 2025
- Ex-Bonus Date: June 9, 2025
- Purpose: To enhance liquidity and reward long-term shareholders
This bonus announcement aligns with Motherson’s track record of strong returns and shareholder-friendly policies.
Bonus Share Ratio and Record Date
Understanding the bonus issue is crucial for existing and prospective investors.
Details:
| Parameter | Information |
|---|---|
| Bonus Share Ratio | 1 bonus share for every 2 existing shares |
| Record Date | June 10, 2025 |
| Ex-Bonus Date | June 9, 2025 |
| Shareholder Eligibility | Those holding shares as of record date |
Note: The shares will trade ex-bonus from June 9, 2025. To be eligible, investors must purchase the stock at least two days before the ex-date.
Why Do Companies Issue Bonus Shares?
Companies typically issue bonus shares to:
- Increase retail participation
- Enhance share liquidity
- Reward shareholders without affecting cash reserves
- Signal confidence in future growth
For Motherson, the bonus is a reflection of its strong financials and expansion strategy across Europe, Asia, and North America.
Motherson Share Price Before and After Bonus
Before the bonus announcement, Motherson share price was trading around ₹140. Following the bonus announcement, the stock witnessed a surge due to positive sentiment.
Motherson Price Movement:
| Date | Share Price (₹) |
|---|---|
| May 28, 2025 | ₹140 |
| May 29, 2025 | ₹149 |
| May 30, 2025 | ₹153 |
| Estimated Price Post-Bonus (Theoretical) | ₹102 |
The theoretical ex-bonus price is adjusted downward to reflect the increased number of shares. However, the total investment value remains the same.
Impact on Investors and Shareholding
Issuing bonus shares increases the number of shares held without changing the total investment value.
Example:
- If you own 100 shares at ₹140 each, your total value = ₹14,000
- After a 1:2 bonus, you receive 50 additional shares (100 + 50 = 150 shares)
- Post-bonus price adjusts to ~₹93.33 (theoretically)
- Total investment value remains ~₹14,000
Bonus shares are not taxed as income when received but may impact capital gains when sold.
Financial Performance Behind the Bonus Issue
The decision to issue bonus shares is backed by a solid performance in FY2024-25.
Samvardhana Motherson FY25 Results (Consolidated):
| Metric | FY25 | FY24 | YoY Growth |
|---|---|---|---|
| Revenue | ₹1,18,000 crore | ₹96,000 crore | 23% |
| Net Profit | ₹4,210 crore | ₹3,260 crore | 29% |
| EBITDA | ₹11,500 crore | ₹9,100 crore | 26% |
| EPS | ₹5.90 | ₹4.58 | — |
| Net Debt | Reduced by ₹2,200 crore | — | — |
The strong earnings and healthy cash flow allowed the company to opt for a bonus issue without hurting its reserves.
Market Sentiment and Brokerage Reactions
Brokerages have responded positively to the bonus share announcement and the company’s strong quarterly results.
Brokerage Ratings:
| Brokerage | Rating | Target Price (Post Bonus) | Remarks |
|---|---|---|---|
| ICICI Direct | Buy | ₹120 | Bonus improves liquidity |
| Motilal Oswal | Neutral | ₹110 | Wait for price stabilization |
| Axis Securities | Buy | ₹130 | Attractive long-term bet |
| HDFC Securities | Accumulate | ₹125 | Positive long-term fundamentals |
Tax Implications of Bonus Shares
- Bonus shares are not taxed at the time of issue.
- The cost of acquisition for bonus shares is considered ₹0.
- On selling bonus shares, full sale value is considered capital gain.
- Holding period determines whether gain is short-term or long-term.
Investors should consult their tax advisors for personalized guidance.
How to Check Bonus Shares in Demat Account
Once allotted, bonus shares will reflect in your demat account within 15 days of the record date.
Steps:
- Log in to your demat account (Zerodha, Groww, Upstox, etc.)
- Go to ‘Holdings’ or ‘Portfolio’
- Check the updated share quantity
- Bonus shares may appear as “under process” for a short time
Should You Buy Motherson Shares Now?
Reasons to Consider Buying:
- Strong earnings growth
- Shareholder-friendly management
- Global expansion across EV components
- Bonus issue improves affordability and liquidity
Cautionary Points:
- Share price may be volatile near the ex-date
- Short-term correction possible after record date
- Monitor global automotive demand trends
Conclusion: If you’re a long-term investor focused on value and growth, Motherson shares remain a solid pick, especially after the bonus issue enhances liquidity.
Frequently Asked Questions (FAQs)
1. What is the Samvardhana Motherson bonus share ratio in 2025?
The company announced a 1:2 bonus share ratio — 1 bonus share for every 2 held.
2. What is the record date for Motherson bonus shares?
The record date for the 2025 bonus issue is June 10, 2025.
3. How will the Motherson share price be adjusted after the bonus?
The share price is expected to adjust proportionally, though actual prices depend on market demand.
4. Will I get bonus shares if I buy the stock on the record date?
No. To be eligible, you must buy the shares at least two trading days before the ex-bonus date.
5. Are bonus shares taxable?
Bonus shares are not taxed when received, but capital gains tax applies when sold.
Conclusion
The announcement of Samvardhana Motherson bonus shares 2025 adds another feather to the cap of this high-performing auto components giant. The 1:2 bonus issue reflects the company’s robust earnings, strong future outlook, and consistent focus on rewarding shareholders.
With the Motherson share price seeing positive momentum post-announcement, investors are excited about both capital appreciation and increased shareholding. If you’re a long-term investor or tracking the auto ancillary sector, Motherson’s bonus issue offers an excellent entry or accumulation opportunity.