“The Board has approved the issuance of bonus shares to the shareholders of the company in the ratio of 1:4, i.e., 1 bonus equity share of Rs 10 each fully paid-up for every 4 existing equity shares of Rs 10 each fully paid-up, to the eligible members by capitalizing a sum not exceeding Rs 660 crore,” the company stated in a filing.
The bonus shares will be distributed from the balance outstanding to the credit of the securities premium account, subject to the approval of shareholders.
The record date for this will be announced shortly and the bonus shares will be credited within two months from the date of Board approval.
A company issues bonus shares to its shareholders with the aim of increasing the liquidity of the stock and reducing its stock price to be more affordable for investors.
Bonus shares are additional fully paid shares issued by a company to its existing shareholders. Shareholders do not have to pay any extra costs to receive bonus shares. The number of bonus shares received depends on the number of shares the shareholder already holds.
All shareholders who own shares of the company prior to the record date, determined by the company, are eligible for additional shares. The bonus shares allotted will have equal rights and privileges as the existing equity shares and will be entitled to fully participate in dividends and other corporate actions.
In addition, the Board has decided to defer the proposal for dividend payment for the fiscal year 2023-24.
In the first quarter, Power Finance Corp recorded a 26% year-on-year increase in consolidated net profit, amounting to Rs 5,982 crore, while revenue from operations rose by 13% to Rs 20,992 crore.
On Friday, the company’s shares closed at Rs 263.40 on NSE, experiencing a 1.37% decrease.