An event study analysis of the impact of bonus share announcements on Nifty 100 and Nifty Midcap 100 companies

Pankaj Kumar Mahato ()

International Journal of Accounting, Business and Finance, 2022, vol. 2, issue 1, 14-30

Abstract: This study examines how the large-cap and mid-cap firms listed on the National Stock Exchange responded to bonus share announcements between January 1, 2006, to September 30, 2022. The conventional event study approach has been utilized, along with the commonly used market model assessment of predicted returns to analyze 45 pure events during this period consisting of 20 events of large-cap and 25 events of midcap stocks. According to the analysis, stock values significantly changed around the time of occurrence. Announcements of stock dividends typically increase stock prices. The mean of average abnormal return around the event for Nifty Midcap 100 indexed companies (0.2087) is higher than that for Nifty 100 indexed companies (0.1446), although the difference is insignificant. The study also shows that the cumulative average abnormal return for Nifty Midcap 100 indexed companies (6.472) is higher than that for Nifty 100 indexed companies (4.483) during the event period.

Keywords: Event Study; Bonus Share; Market model; Mid-cap; Large-cap (search for similar items in EconPapers)
Date: 2022
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