Shares of Bharat Rasayan Ltd. surged by up to 12% on Monday, October 20, following the company’s announcement that its board will meet to consider a bonus share issue and a stock split alongside its September quarter results.
Board Meeting and Record Date
The company stated in an exchange filing that the board is scheduled to meet on Friday, October 24, to deliberate on these proposals. The record date for determining eligibility of shareholders for the bonus issue is yet to be announced.
First-Time Bonus and Stock Split
This would be the first instance Bharat Rasayan is considering issuing bonus shares and implementing a stock split for its shareholders.
- Stock Split: This divides existing shares into multiple new shares, making them more affordable and liquid in the market. It encourages trading activity by lowering the price per share while increasing the total number of shares.
- Bonus Shares: These are issued free of cost to existing shareholders, using the company’s free reserves. Bonus shares increase paid-up capital and EPS, while reducing reserves.
Eligibility for Bonus Shares
Shareholders must buy the stock before the ex-date to qualify for the bonus shares. Purchases made on or after the ex-date will not be eligible for the bonus issue.
Summary
Bharat Rasayan’s move to issue bonus shares and split stock reflects its strategy to enhance shareholder value and improve liquidity. Investors are keeping a close watch ahead of the board meeting on October 24, which could unlock further market interest in the stock.
Disclaimer:
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