India, July 5 -- Bonus shares are free shares that a company gives to its existing shareholders. These shares are issued from the company's reserves, and shareholders do not have to pay anything to receive them. While the total value of an investor's investment remains the same, the number of shares they own increases. Bonus shares are often seen as a sign that a company is financially strong and confident about its future.

A stock split means a company divides each existing share into multiple shares with a lower face value. This increases the total number of shares but does not change the overall value of an investor's holdings. Stock splits make shares more affordable for small investors, improve trading activity, and increase liquidi...