BNBL Share price won’t move most of the times. But it started increasing in past few days – so active.

During the 27th AGM on 15/03/2023, Bhutan National Bank Ltd declared a 13.8% dividend and a bonus issue at 1:4 ratio.

Number of my friends were asking how to calculate the dividend amount receivable and also the bonus shares.

I also saw people asking about it in the RSEBL Facebook Page comment section.

To my friends and also those who do not know well, let me share how to calculate them.

Since, bonus share and cash dividend will impact the market price of the share, let us also calculate the new price of BNBL shares.

Just for this, assume I own 10,000 shares of BNBL with an average price of Nu.32. Face Value of BNBL share is Nu.10.

BNBL Declared Dividend of 13.8% for 2022

When the dividend is 13.8%, it means 13.8% of the face value. In another word, it’s Nu.1.38 per share (13.8% x 10 = 1.38).

In another method, we can also use given formula and calculate dividend receivables: Since I own 10,000 BNB Shares, my total dividend receivable for this year would be Nu.13,800 (1.38 x 10,000).

BNBL will Give Bonus Issue of 1:4 for 2022

When BNB declared bonus issue at 1:4 ratio, it means BNBL will give one free share for every four you own.

This means I’ll be getting free bonus shares of 2,500 (10,000/4) as I own 10,000 shares before the bonus.

The total no. of BNBL shares I’ll own after the bonus issue will be 12,500 (10,000+2,500).

Impacts of Bonus Issue on Share Prices

Bonus issue will increase the number of shares in the market. In my case alone, there is an increase of 2,500 shares.

Therefore, the share price will be adjusted due to an increase in the total no. of shares.

Since the total number of shares increased, the price will decrease. Just opposite to a buyback.

Example: Suppose if BNBL share price is Nu.38 on the record date. BNBL Share Capital will be like below: 

Bonus issue will reduce share price as no. of shares has increased. BNBL Share Capital will be like below:  

The dividend of 13.8% is Nu.1.38 per share. Cash dividend is using of the retained earnings. It’ll reduce the value of BNBL.

This too must be deducted from the share price to show the true value of the company. BNBL share price will be Nu.29.02 (30.40-1.38) after the cut-off date.

The BNB Share price here is for conveniences. It might be higher or lower than that on the actual record date. 

Good Time to Buy More BNBL Shares Now?

The record date for the bonus issue and dividend is 24th March. There is so much hype. People want to stack more BNBL shares for the bonus and dividend.

This has increased both the demand and the price. But once bonus issue is done and dividend is paid, people will sell them off.

So, it’s not a time to sell your BNBL Shares or buy more. I will add more in my portfolio when others seem fearful. Most are greedy now.

In this post, I used BNBL Share capital as an example. We can apply the same logic for bonus issues of PCAL and TBank as well. 

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