Shares of Samvardhana Motherson International Ltd (SMIL)—formerly known as Motherson Sumi Systems—and Motherson Sumi Wiring India Ltd (MSWIL) saw significant price movements on July 18, 2025, as both stocks began trading ex-bonus.
Following the record date of July 17, a 1:2 bonus issue came into effect, triggering mechanical price adjustments in both counters. SMIL’s shares dropped sharply—by over 33%—while MSWIL gained intraday by approximately 4.3%.
Motherson Sumi Bonus Issue and Ex-Date Effects
The bonus issue declared by both companies entitles eligible shareholders to one bonus share for every two shares held as of the record date: July 18, 2025. This marked SMIL’s 10th bonus issue since 2000, reflecting its strong shareholder reward history, while it was MSWIL’s second bonus since its listing in 2022.
As expected with any ex-bonus date, share prices adjusted downward to account for the increased number of outstanding shares. Investors buying the stock after July 17 are not eligible for the bonus, resulting in recalibrated pricing from the previous week.
Market Reaction: Sharp Movement in Both Stocks
| Company | Ex-Bonus Price | Intraday High | Notes |
|---|---|---|---|
| Samvardhana Motherson (SMIL) | ₹101–102/share | ₹103.59 | Dropped ~33% post-bonus |
| Motherson Sumi Wiring India | ₹44–45/share | ₹44.80 | Gained ~4.3% intraday |
The price movement in SMIL may appear alarming on the surface, but analysts emphasize that it is a mechanical adjustment, not a reflection of negative fundamentals. Meanwhile, the rally in MSWIL suggests investor confidence in the wiring segment’s growth potential.
Outlook and Investor Takeaways
The drop in SMIL’s share price is not a sell signal, but rather a mathematical adjustment due to the bonus share issuance. Investors now hold more shares at a lower price, keeping total investment value roughly unchanged.
In contrast, MSWIL’s upward move suggests continued investor optimism, possibly due to its higher ROE and focused wiring business, which is crucial in the EV and automotive space.
From a long-term investment lens, both companies maintain solid fundamentals. While SMIL appears more attractively valued, MSWIL carries momentum and strong financial performance, albeit at a higher valuation multiple.
Conclusion
Today’s price fluctuations in Motherson Group stocks are driven by bonus share mechanics, not by operational changes. For investors, the key consideration is whether the post-bonus valuations align with business fundamentals and long-term growth trajectories.
Both companies continue to reward shareholders and exhibit robust metrics, making them compelling watchlist candidates in India’s auto components and EV supply chain sectors.
F.A.Q.
– Why did Samvardhana Motherson’s stock price fall by over 30%?
The stock price fell due to the 1:2 bonus issue adjustment. It’s a mechanical drop—not a business decline. Shareholders now hold more shares at a lower per-share price, keeping overall investment value the same.
– What is the bonus issue ratio for SMIL and MSWIL?
Both companies issued 1 bonus share for every 2 shares held as of the record date: July 18, 2025. This increases the total number of outstanding shares and dilutes the per-share price accordingly.
– Who is eligible to receive bonus shares?
Only shareholders who owned shares on or before July 17, 2025 (ex-date) are eligible for bonus shares. Anyone buying after this date will not receive the bonus.
– Why did MSWIL stock go up while SMIL dropped?
MSWIL rallied around 4.3% intraday post-bonus due to positive investor sentiment and its strong fundamentals, especially high ROE (~35.9%). SMIL’s drop was purely due to bonus adjustment.
– Should I buy Motherson shares now after the bonus adjustment?
That depends on your investment goals. Analysts estimate a ~66% upside for SMIL based on fundamentals, while MSWIL remains attractive despite a higher valuation. Long-term investors may find this an appealing entry point.
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