What is meant by issue of Bonus Shares? Discuss the guidelines issued by SEBI for issue of bonus share.

The issue of bonus shares refers to the process by which a company issues additional shares to its existing shareholders, free of cost, in proportion to their current holdings. Instead of paying out dividends in cash, a company may decide to capitalize its reserves (such as the general reserve or the profit and loss account) to issue bonus shares. This process increases the total number of shares in circulation while maintaining the overall value of shareholders' holdings. The bonus shares are issued in the form of a specific ratio, for example, one bonus share for every two shares held, or in other terms like 1:1, 2:3, etc.

The primary purpose of issuing bonus shares is to reward existing shareholders without affecting the company’s cash reserves. It may also signal to the market that the company is doing well and has accumulated _____ ___ _______ ________ ________ _________ _____ ______ _______ ___.
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