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Patanjali Foods on Thursday announced bonus issuance in the ratio of 2:1 for its shareholders. A 2:1 bonus--read as two for one--means that shareholders will get two additional shares for each share held in the company. The FMCG company's board has approved the bonus issuance, which is subject to shareholder's and other necessary approvals. 

The company said it will notify the record date in due course of time. 

The bonus issue will amount to Rs 145 crore, according to a regulatory filing. 

About 72.5 crore equity shares, with a face value of Rs 2 each, will be issued as part of the arrangement. 

The company said that the actual number of bonus shares to be issued will be determined based on the fully paid-up equity shares as on the record date.

The bonus shares will be doled out roughly within the next two months, by September 16, the company said. 

Patanjali Foods shares traded flat moments after the announcement at Rs 1,861 apiece on BSE, having see-sawed within a Rs 30 range--between Rs 1846.4 and Rs 1,876.4 in intraday trade so far.   

The stock has risen about 3.1 per cent so far this year, underperforming a 6.1 per cent gain in the headline Nifty 50 index. 

One of the ways for companies to reward their investors, just like dividends, bonus issues allow listed companies to make a a stock look more attractive to investors. 

Bonus payouts enable listed companies to increase the number of equity shares in the market, without altering their market capitalisations (mcaps). 

Simply put, under a bonus issue, existing investors get additional shares added to their portfolios.

There are two main terms that describe bonus shares. 

For instance, a company may give one bonus share for every share held. In such a case, the bonus will be described as a '1:1' (one for one) bonus.

Typically, bonus shares are funded through profits or existing share reserves.

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