Atam Valves Ltd. a microcap company has recorded a strong increase in its share price so far this year. The company is engaged in the manufacturing, production and sale of all types of valves, cocks, boiler mounting, pipe fittings, sanitary fitting, and the fabrication of steel and iron or non-ferrous metal and by-products.
The stock was trading below ₹ 50 levels at the beginning of this calendar year and it is currently trading at ₹ 325.00 levels. Therefore, it has given multibagger returns of 584.21% on a year-to-date basis. Therefore, if an investor would have invested ₹ 1,00,000 in the shares of the company at the beginning of this year, the value of their holdings would have been ₹ 6,84,210 today!
In a BSE Filing, the company stated that it is coming up with a bonus issue in the ratio of 1:1. This means that it will issue one equity share for every existing equity share that is held by its shareholders. The face value of the shares is ₹10 each.
Earlier, the company had set 12th October 2022, as the record date for the bonus issue. However, it informed the Bombay Stock Exchange (BSE) that it has revised the record date for the purpose of ascertaining the eligibility of shareholders entitled to the issuance of fully paid-up bonus shares. The new date for this purpose is Monday, October 24, 2022.
The shares will start trading ex-bonus on October 21, 2022. Therefore, shareholders must buy the shares before the ex-date and continue to hold them as of the record date (October 24, 2022) to be eligible for the bonus issue.
Atam Valves has a market capitalization of ₹ 104 crores and is a microcap company. Its shares are trading at a price-to-equity (PE) ratio of 68.13, which is significantly higher than the sector PE of 16.40. Hence the stock may be overvalued. Investors must do a complete fundamental analysis of this stock before investing in it.
The company debuted on the BSE on October 6, 2020, under the MT Group of Securities. This means that trading and clearing & settlement are done on a gross basis for these scrips. If investors are willing to buy these shares, it is important to note that they might have to buy the shares one or two days before the ex-date, due to the settlement dates.
If the shares have a settlement date of T+1, it means that the shares will get credited to the Demat account of the investors in 24 hours.
Written by Simran Bafna
Disclaimer
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