Ashok Leyland Share Price Halves Post Bonus Issue: Here’s What Happened

Market Performance

On July 16, Ashok Leyland's share price witnessed a dramatic fall of over 50%, sparking confusion among retail investors. The stock opened at ₹125 on the NSE, sharply lower than its previous closing price of ₹251.

Despite what appeared to be a significant plunge, the decline wasn't due to adverse market sentiment or poor performance—it was purely a technical adjustment following the company's 1:1 bonus share issuance.

Main News

Ashok Leyland's stock turned ex-bonus on July 16, 2025, following the company's announcement of a 1:1 bonus issue. The price correction reflected the adjustment in share value, not a drop in the actual worth of investor holdings.

• A shareholder holding one share worth ₹100 before the record date will now hold two shares worth ₹50 each.
• This change ensures no loss in total investment value.
• Bonus shares are scheduled to be allotted on July 17 and will be tradable from July 18.

This is Ashok Leyland's first bonus issue in 14 years—the last one being a 1:1 issue in 2011.

Company Details

Ashok Leyland, a key player in the commercial vehicle sector, has consistently delivered solid financial results while maintaining strong investor interest.

• The Price-to-Earnings (P/E) ratio currently stands at 44, reflecting the company's premium valuation due to its growth prospects.

The firm announced the bonus issue earlier in May 2025, with July 16 marked as the record date to identify eligible shareholders.

Financial Performance Snapshot (Q4 FY25)

Revenue

• ₹11,906.7 Crore in Q4 FY25
• Up 5.7% from the previous year

Net Profit

• ₹1,246 Crore in Q4 FY25
• Up 38.4% from ₹900 Crore in Q4 FY24

This jump in profitability was attributed to steady revenue growth and strong sales performance during the quarter.

Summary of the Article

The sharp drop in Ashok Leyland's share price on July 16 is a result of the stock turning ex-bonus after a 1:1 bonus issue, rather than a market-led decline. Investors' total value remains unchanged. The company continues to post healthy earnings, with a 38.4% surge in quarterly profit and a 5.7% rise in revenue. This marks Ashok Leyland's first bonus issue in over a decade, reinforcing its commitment to shareholder value.