What is a No Delivery (Or Book closer) period while processing bonus shares?
When company decide for bonus shares it announces the record date and inform the same to stock exchanges where the stock of the company is listed. To ensure the adequate entitlement for the bonus shares, stock exchanges then decide the ‘No Delivery’ period for the stock. Stocks can be traded in this period but trades are only settled after the ‘No Delivery’ period. Pay-out date for these settlement falls just after the end of the ‘No Delivery’ period. The start of ‘No Delivery’ date is also known as ‘Ex Date’ for the settlement. The buyer of the shares on or after the ex-date’s are not be eligible for the bonus shares while the seller are eligible for the same. Example: Reliance Power limited declared following dates for its bonus shares in year 2008: • Bonus share ratio: 3:5, 3 Bonus shares for every 5 shares hold by investors. • Record date: Monday, June 02, 2008 • Book remains close to process bonus share: From Tuesday, June 03, 2008 to Thursday June 05, 2008. • Trading date for cum
