Explainer Share Market: 46 bonus shares for every 1 share, along with 6% interest:

News Topical, Digital Desk : The company has a big surprise for shareholders. The board has approved the issuance of Cumulative Non-Convertible Redeemable Preference Shares (NCRPS) as a bonus under a Scheme of Arrangement. For every 1 share (₹5 face value), 46 NCRPS (₹10 face value) will be issued. These will carry a 6% annual coupon and will be redeemed at ₹10 plus interest 12 months after allotment. The proposal is pending approval by the stock exchange, NCLT, and shareholders. Let's learn more about this...

First, let's find out which company made this announcement and what it is. The board of TVS Holdings Limited passed a significant resolution at its meeting on September 22, 2025: "The company will issue NCRPS to its shareholders as a bonus. This issue is part of a Scheme of Arrangement prepared under Sections 230-232 of the Companies Act, 2013.

After the scheme is implemented, every shareholder on the record date will receive 46 NCRPS for every 1 share held. Each NCRPS will have a face value of ₹10 and will be issued at face value.

What will the share buyers receive? According to TVS Holdings' scheme, for every 1 equity share (₹5 face value), you will receive 46 bonus NCRPS (Preference Shares). Each NCRPS will have a face value of ₹10. These will carry a 6% annual coupon and will be redeemed after 12 months (₹10 plus interest)." In your case (100 equity shares): 100 × 46 = 4,600 NCRPS. Their total face value = 4,600 × ₹10 = ₹46,000. Upon redemption after 1 year, you will receive ₹46,000 + 6% interest (approximately ₹2,760) = approximately ₹48,760, meaning you will receive a cash-like return in the form of bonus on 100 shares over the next 1 year. The company stated that these will be Cumulative Non-Convertible Redeemable Preference Shares, which will carry a coupon of 6% per annum. The coupon will be paid annually and will be paid along with the redemption. Thus, the holder will receive ₹10 face value + interest at the time of redemption. The maturity period for these NCRPS is 12 months from the date of allotment. The company also proposes to list them on the NSE and BSE. This bonus issue will be made from the company's general reserves/retained earnings. Based on the existing share capital, the issue size is approximately ₹986.52 crore. According to the company's audited financials as of March 31, 2025, retained earnings and securities premium are ₹1,456.26 crore—capitalization will be from this. The available balance will be utilized on the scheme's effective date. In the post-issue share capital structure, the size of NCRPS is estimated to reach ₹930.68 crore (93,06,76,784 NCRPS), while the equity portion will remain at ₹10.12 crore (2,02,32,104 equity shares)—this calculation is an indicative profile based on data as of September 22, 2025. The record date will be determined/informed as the scheme progresses.

What are the remaining approvals? Before the scheme can be implemented, approvals from the stock exchanges, NCLT, and the company's shareholders/creditors are required. The company stated that a copy of the scheme will be made available on its website after it is submitted to the stock exchanges. The board meeting began at 2:00 PM and concluded at 2:25 PM (IST).