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

Bonus shares refer to additional shares issued by a company to its existing shareholders without any cost, based on the number of shares the shareholders already hold. It is a way for companies to reward their shareholders, often when the company has accumulated sufficient reserves and has no immediate requirement for the cash. Essentially, bonus shares are a capitalisation of the company's retained earnings or reserves, converted into additional equity shares for distribution to the shareholders.

The issuance of bonus shares increases the total number of shares in circulation, but it does not affect the overall value of the shareholders' investment since the price of each share is adjusted accordingly. For example, in a 1:1 bonus issue, shareholders receive one new share for every share they already own. After the bonus issue, the market price of the shares generally adjusts downward, reflecting the increased number of shares outstanding.

The issuance of bonus shares typically occurs when the company has accumulated substantial reserves and wants to reward its shareholders without distributing cash. This can also be a strategy to increase liquidity _____ _____ __________ _________ __________ _________ ________.
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