Bonus Alert: This ₹2,074 crore company announces 1:1 free share issue plan
Monarch Networth Capital Ltd. on Sunday, July 28, announced that it will issue one bonus share for every one share held by shareholders as on the record date.
Record date for the said bonus issue is yet to be determined.
This will be the first instance of the company considering an issue of bonus shares to shareholders. The company has never split its stock either. However, the company has issued dividends to its shareholders.
In an exchange filing, the company said, "Approved issue of bonus shares by way of capitalisation of reserves, to the equity shareholders of the company in the ratio of 1:1 i.e., one new fully paid-up equity shares of ₹10 each for every one existing fully paid-up equity share of ₹10 each held by the eligible shareholders as on the record date (to be determined by the Board) subject to approval by members and any other applicable statutory and regulatory approvals."
The company has also secured an equity fund raise of ₹300 crore at ₹ 560 per share through preferential allotment.
The board of the company has approved increasing the authorised share capital from existing ₹65 crore to ₹100 crore-, the filing added.
The companies issue bonus shares to capitalise on their free reserves, increase their Earnings Per Share (EPS) and paid-up capital, along with reducing the reserves. Shareholders are issued these shares at no additional cost and hence are also known as free shares.
Only those investors will be eligible for bonus shares who will buy the stock before the ex-date. If an investor purchases the shares on the ex-date or after that, they will not be eligible to get bonus shares.
Shares of Monarch Networth Capital Ltd. settled 1.76% higher at ₹618 apiece on the NSE on Friday. At the current levels, the company commands a market capitalisation of ₹2,074 crore.
The stock has risen over 40% so far in 2024 and is up 90% over the last 12 months.
