1:2 Bonus Issue: Trent's first-ever shareholder reward is days away; here's what should investors know

Shares of Trent, the Tata Group company that operates the Westside and Zudio retail chains, will be closely watched this week as the record date for its first-ever bonus issue approaches. The stock closed at Rs 4,153 on the NSE on Monday, down Rs 77 or 1.68 per cent.

The retailer has fixed June 4 as the record date for its 1:2 bonus issue, under which shareholders will receive one additional equity share for every two shares held. The announcement, made in April alongside the company's quarterly earnings and dividend declaration, has put the stock back in the spotlight after a difficult year on the bourses.

For many investors, the question now is whether buying the stock before the record date offers any real advantage.

Company to issue 17.77 crore bonus shares

Trent plans to issue around 17.77 crore bonus shares with a face value of Re 1 each. The issue will be funded through the capitalisation of Rs 17.77 crore from the company's share premium account.

The company had originally fixed May 29 as the record date but later pushed it to June 4. Bonus shares are expected to be credited by June 21.

This is the first time Trent has announced a bonus issue. The company has, however, undertaken a stock split in the past. In 2016, it split its shares in a 10:1 ratio.

The bonus announcement came together with a final dividend of Rs 6 per share for FY26.

Stock has corrected sharply from its highs

The bonus issue comes at a time when Trent's share price has undergone a significant correction.

Over the past year, the stock has fallen more than 25 per cent. It has also slipped marginally on a year-to-date basis in 2026. The decline follows an extraordinary rally over the previous few years that turned Trent into one of the strongest-performing retail stocks in the market.

Even after the recent correction, long-term returns remain substantial. The stock has gained more than 175 per cent in three years and over 400 per cent in five years.

Shareholding data for the March quarter showed promoters holding about 37 per cent of the company, while public shareholders accounted for the remaining 63 per cent. Tata Sons remained the largest shareholder with a stake of more than 32 per cent.

Trent quarterly earnings remain strong

Trent's March-quarter numbers provided another reminder of why the company continues to attract investor interest.

Net profit for the quarter rose 26 per cent year-on-year to Rs 400 crore from Rs 318 crore a year earlier. Revenue from operations increased 19 per cent to Rs 5,028 crore.

The growth was driven by continued expansion across its retail formats, particularly Zudio, which remains the company's fastest-growing business.

The board also approved a proposal to raise funds through a rights issue or other methods, although further details are yet to be announced. Separately, the company cleared an employee stock option plan involving nearly 8.89 lakh shares.

What should investors keep in mind?

A bonus issue often creates excitement because shareholders receive additional shares without making any fresh investment. However, the overall value of their holding remains unchanged as the stock price adjusts after the bonus shares are issued.

Because of this, analysts generally advise investors not to take a decision based solely on the bonus issue.

Instead, the focus remains on business performance, earnings growth, store expansion and valuations. For Trent, investor confidence continues to be tied to the growth of Zudio, the performance of Westside and the company's ability to maintain its pace of expansion in India's organised retail market.

With the June 4 record date approaching, trading activity in the stock could remain elevated.