Understanding the Real Reason Behind Concord Control Systems Share Price Falling 37% Today

Kanpur, October 16: Concord Control Systems Limited share price started today’s trading session by falling 37% at ₹1746.10, in comparison to its previous close of ₹2,793.75 on October 15. However, investors should not worry as the share price fall is an adjustment to the company’s 3:5 bonus issue, and the share price is trading ex-bonus today. The adjustment will not have any change in the investment value of investors. In reality, the share price is up by 4.46%, or 77.90 points, and is currently trading at ₹1,824, as of 10:AM.

Understanding the Share Price Fall

When companies execute bonus issues, the investors receive extra shares as per the bonus issue ratio. For example, eligible shareholders of Concord Control Systems Limited will receive three additional shares for every five shares held. Since extra shares are being credited to the demat accounts of eligible shareholders, the share price falls in proportion to the bonus issue, so that the total investment value remains the same. Hence, the fall in the share price today will not affect the investment value, resulting in no monetary loss.

Concord Control Systems Limited is an Indian company that is engaged in the manufacturing of components mainly for the Indian Railways. The company was established in 2011 and is headquartered in Kanpur, Uttar Pradesh. The shares of the company are listed on the BSE with the code 543619.

Companies come out with a bonus issue to reward shareholders for their confidence in the company and for holding the shares. It also increases the liquidity and makes the share price more attractive to the investors.

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