Rhetan TMT, an iron and steel company, has announced a bonus issue as well as the sub-division (stock split) of its shares. The company currently manufactures TMT bars and round bars which are primarily used in the construction industry. Its shares were quoting at ₹ 454.00 apiece at 03:00 PM on Tuesday and it has a market capitalization of ₹ 961 crores.
In a recent stock exchange filing, the company said that its board has considered and approved the migration of the company from the SME platform of the Bombay Stock Exchange (BSE) to the Main Board of BSE and National Stock Exchange of India (NSE), subject to the approval of the members, exchanges and statutory approvals.
1:10 Stock Split
The board has approved an alteration in the capital of the company by way of a split or sub-division of one equity share of the company of the face value of ₹ 10 to ten equity shares of the face value of ₹ 1 each.
It said that the rationale behind the split is to enhance the liquidity of its shares and widen its shareholder base by making the shares more economical. It expects to complete the split tentatively within two months from the date of the board’s approval
11:4 Bonus Issue
The board has also approved the issue of eleven bonus shares for every four shares held by the equity shareholders of the company as of the record date. The record date will be decided in due course of time. It will issue eleven equity shares for every four shares held, as on the record date.
The company will have 58,43,75,000 equity shares of ₹ 1 post-split. These shares will be eligible for the bonus issue if held as of the record date. Bonus shares will be issued out of the securities premium of the company, as available on September 30, 2022.
A share premium of ₹ 58,43,75,000 is required for implementing the bonus issue. The company had ₹ 59,10,00,000 as the balance available in the Securities Premium account. It is estimated that the bonus shares would be credited within two months from the Board’s approval, i.e. by February 18, 2023.
Multibagger
The company got listed in September 2022. Its share price has soared from ₹ 66.50 to the current level, giving multibagger returns of 582.71%. If an investor would have invested ₹ 1 lakh in the shares of the company four months ago, the value of their holdings would have been ₹ 6.83 lakhs today!
Written by Simran Bafna
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