SME stock hits record high on bonus shares, stock split news; up 135% in a mth
Shares of Rhetan TMT Ltd surged as much as 4% hit a record high of ₹469 apiece on the BSE in Thursday’s early trading session after the company announced the issuance of bonus shares along with stock split or sub-division of the equity shares of the company.
“The Board of Directors of the Company in its meeting held on Wednesday has considered the issue of 11 (Eleven) Bonus Shares for every 4 (four) Equity Shares held by the Equity Shareholders of the Company as on ‘Record Date’,” it said in an exchange filing.
The Bonus Issue of Equity Shares is subject to the approval of the shareholders and other applicable statutory and regulatory approvals, as may be required. The company said it will intimate the ‘Record Date’ for determining eligible Shareholders entitled to receive bonus shares, in due course of time.
The bonus shares once allotted shall rank pari-passu in all respects and carry the same rights of the existing Equity Shares and shall be entitled to participate in full in any dividend and either corporate action(s), recommended and declared after the issue and allotment of such Bonus Shares, Rhetan TMT added.
Additionally, the company’s board also approved the split/sub-division of 1 (One) Equity Share of the company having Face Value of Rs. 10/- each into 10 (Ten) Equity Shares of the Company having Face Value of Re. 1/- each.
Explaining the rationale behind the stock split decision, the company said that it has been done to enhance the liquidity of Equity Shares and widen the shareholders base by making the Equity Shares more economical to the investors.
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. A company engages in stock split decision to make its stock more affordable if its price levels are very high, which in thus would lead to increase in liquidity in the stock. Meanwhile, bonus shares are fully paid additional shares issued by a company to its existing shareholders.
Rhetan TMT Ltd. is a small-cap company that operates in the capital goods industry. The company is actively involved in producing TMT bars and round bars. Rhetan TMT trades in the SME segment on the BSE. The stock has given multibagger return of more than 135% in just a month whereas it has rallied over 582% in 2022.
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