In the stock market, a bonus issue brings that same warm feeling.
It’s when a company rewards its shareholders by issuing additional shares free of cost, usually out of its accumulated profits or reserves.
It’s a company’s way of acknowledging its shareholders, sharing the rewards of growth.
It’s more than just about the extra shares; it’s often seen as a signal of a company’s confidence in its growth and a gesture of goodwill toward loyal shareholders.
In recent months, many companies have delighted their shareholders with unexpected bonus announcements, adding a touch of excitement to the markets.
Joining the list is HDFC Asset Management Co. (HDFC AMC).
Here’s all you need to know about the latest one:
- HDFC AMC, on 15 October 2025, announced a bonus issue.
- The company has declared a bonus issue in the ratio of 1:1. This means one equity share for one fully paid-up equity share held by shareholders.
- The bank has set 26 November as the record date for the same.
This marks the first bonus issue announced by the AMC.
While HDFC AMC has not issued any bonus shares to its shareholders, it has regularly rewarded shareholders through dividends.
Since 2019, the company has paid dividends worth ₹336 per share to its shareholders, including ₹90 per share that it paid in June this year.
Is this a sweet deal?
The 1:1 bonus of the HDFC AMC seems to be a rewarding step for investors, offering them additional shares without any additional cost.
Historically, such corporate actions indicate confidence in the company’s future prospects and often lead to increased liquidity and investor interest.
However, investors should keep in mind that when the number of shares increases, the stock price usually adjusts accordingly, which means that the overall value of holdings remains the same in the short term.
For long-term investors, the bonus issue reinforces HDFC AMC’s commitment to shareholder returns, particularly given its history of dividend payments and share buybacks.
However, traders expecting immediate price growth should be cautious, as the market spirit and demand will eventually determine the bonus after the stock movement.
Robust Q2 results
Along with announcing its first-ever bonus issue, HDFC AMC also reported a strong set of financial results for Q2FY26.
The company’s revenue from operations rose to ₹1,027 crore in Q2FY26, marking a 15.8% year-on-year increase from ₹887 crore in the same quarter of the previous fiscal.
The HDFC Group company’s consolidated profit also saw a healthy jump of 24.6% on-year, climbing to ₹718 crore from ₹577 crore a year earlier.
This strong earnings growth was supported by higher income from its asset management operations and consistent cost efficiencies.
Additionally, HDFC AMC’s assets under management (AUM) grew by 14% on-year, reaching an impressive ₹8,72,800 crore, reflecting robust investor confidence, steady inflows, and the company’s strong positioning in India’s mutual fund industry.
A look at the financials
Over the past three fiscal years, HDFC AMC has demonstrated remarkable growth. The company’s consolidated revenue rose sharply from ₹2,166.8 crore in FY23 to ₹3,498.4 crore in FY25.
This impressive growth reflects steady expansion in AUM, higher fee income, and a broad-based improvement across product categories.
Net profit also saw a significant surge during the same period, climbing from ₹ ₹1,423.4 crore in FY23 to ₹2460.2 crore in FY25.
Between FY23 and FY25, HDFC AMC’s revenue grew at a strong CAGR of about 27%, while net profit rose at an impressive CAGR of nearly 33%.
What’s next?
The Indian mutual fund industry is currently experiencing one of its strongest growth phases ever. As of July 2025, total AUM surpassed ₹77 trillion, with equity-oriented schemes contributing over ₹52 trillion to the total.
Systematic investment plans (SIPs) continue to hit new records every month, reflecting strong and consistent retail investor participation. These inflows have remained resilient even during periods of market volatility, providing stability to the industry and a solid earnings foundation for AMCs.
Another notable trend is the growing popularity of passive funds—including index funds and ETFs—particularly through digital investment platforms.
This signals a gradual but meaningful shift in investor behaviour.
Favourable demographics, rapid urbanisation, and rising financial awareness are expected to further accelerate long-term growth in the sector.
While the industry’s near-term performance could face headwinds from market fluctuations affecting equity returns, the overall outlook for India’s AMC sector remains positive.
With its strong brand, diversified portfolio, and growing investor base, HDFC AMC is well-positioned to capitalize on this ongoing expansion in India’s mutual fund landscape.
How shares of HDFC AMC have performed recently
Over the past one year, the share price of the company has gained 19%.
The stock reached its 52-week high of ₹5,930 on 16 October 2025 and its 52-week low of ₹3,525.1 on 7 April 2025.
HDFC AMC is an investment manager for the HDFC mutual fund. The company has a diversified asset class mix across equity and fixed income/others.
Promoted by HDFC in 1999, Standard Life Investments (SLI) acquired a 26% stake in HDFC AMC in 2001, and now the company operates as a joint venture between HDFC and SLI.
Through organic growth and acquisitions, such as Zurich India and Morgan Stanley MF, the firm has grown to one of the top two AMCs in India.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com.
