Ashok Leyland Shares Halve in Price Post 1:1 Bonus Issue: What Investors Should Know
Business
3 min readby Fresh Feeds AI

Ashok Leyland Shares Halve in Price Post 1:1 Bonus Issue: What Investors Should Know

Ashok Leyland shares fell over 50% on July 16 post 1:1 bonus issue, reflecting a technical price adjustment. Total investment value remains unchanged for shareholders.

On July 16, 2025, Ashok Leyland shares experienced a sharp drop of over 50% in their market price due to a technical adjustment following the company's 1:1 bonus share issuance. The stock opened at ₹125 on the NSE, down from its previous close of around ₹251 per share. This drastic price movement caused confusion among investors, though it was unrelated to the company’s market performance or fundamentals.

Instead, the reduction in share price was a result of Ashok Leyland going ex-bonus on the 16th of July. For every share held prior to the record date, shareholders will receive an additional share free of cost, effectively doubling their shareholding but halving the stock price proportionally. For example, an investor holding 1 share valued at ₹100 would post-bonus hold 2 shares worth ₹50 each, maintaining their total investment value intact.

This is Ashok Leyland's first bonus issue in 14 years, the last being a similar 1:1 issue in 2011. The company announced the bonus share plan in May 2025 to reward shareholders and reinforce confidence in its growth outlook. The bonus shares were scheduled for allotment on July 17 and will become tradable from July 18.

Financially, Ashok Leyland remains a strong player in the commercial vehicle sector with a premium valuation, their Price-to-Earnings ratio standing at 44. Despite the post-bonus correction, the underlying fundamentals and investor value remain unchanged, as the adjustment reflects a change in share capital rather than a loss.

On trading, after the ex-bonus adjustment, the shares traded around ₹124 on July 16, down about 0.64% intraday on the NSE compared to the previous day's closing price. The earlier apparent crash exceeding 50% simply mirrored the technical recalibration of share price for the bonus issue.

Market experts advise investors not to worry about the sharp price drop seen on the ex-bonus date. The average buying price of the stock will be recalculated accordingly, with bonus shares credited at zero cost to shareholders, reducing the weighted average buy price using the FIFO method.

In sum, the Ashok Leyland share price halving is a standard and expected market phenomenon following a 1:1 bonus issuance. Investors who held shares before the record date effectively double their shareholding, keeping their total investment value consistent while adjusting share price per market conventions.

Tags:

#Ashok Leyland#Bonus Issue#Stock Market#Share Price#Investments

Sources:

www.samco.in

www.samco.in

www.goodreturns.in

www.goodreturns.in

www.cnbctv18.com

www.cnbctv18.com

www.news18.com

www.news18.com

www.moneycontrol.com

www.moneycontrol.com