Why has the average price been reduced after receiving bonus shares in TradeJini?

The average price, or buy average price, of a stock decreases when bonus shares are credited to your account because these bonus shares come at no additional cost. The calculation of the holding average follows the First In First Out (FIFO) method. Since bonus shares are essentially free, their buy price is considered zero. When these bonus shares are added to your demat account without any cost, it alters the buy average.