Bonus Share
In short
Companies issue these free additional shares to existing shareholders by converting their saved profits into share capital.
In plain words
Instead of giving you cash, a company gives you more shares. You own more pieces of the company, but the total value of your investment stays the same initially.
A simple example
If you own 10 shares and the company announces a 1:1 bonus issue, you will suddenly own 20 shares. Each share will be worth roughly half of its previous price.
Why it matters
It shows that a company is healthy and wants to reward its investors without spending actual cash. It also makes the individual share price lower and easier for new people to buy.
Easy to mix up
Do not confuse this with a share split, although the mathematical result on the share price is very similar.