NBCC Share Bonus Issue: Key Details and Implications
Introduction
Hello, everyone! today we’re focusing on an important development concerning NBCC India Limited. The stock of NBCC India Limited is expected to gain significant attention in the upcoming week due to the recent Board of Directors’ meeting. we’ll dive into the details of the announced bonus issue, its impact on the stock price, and how it will affect your shares. So, let’s get started!
Key Announcement
The Board of Directors of NBCC India Limited has announced a bonus issue, as detailed in their recent exchange filing on the NSE website. The key aspects of this bonus issue include:
- Bonus Ratio: The company has announced a bonus issue in the ratio of 1:2. This means that for every two shares you currently hold, you will receive one additional share as a bonus. This is similar to a previous bonus issue made by the company seven years ago.
- Record Date: This bonus issue’s record date is Monday, October 7, 2024. Shareholders registered on this date will be eligible to receive the bonus shares.
- Face Value: The face value of both the existing and bonus shares is ₹1. The company plans to issue a total of 90 crore new equity shares out of its free reserves.
Details of the Bonus Issue
Share and Capital Structure
- Pre-Bonus Structure: Currently, NBCC India Limited has 180 crore shares with a total share capital of ₹180 crore.
- Post-Bonus Structure: With the issuance of 90 crore new bonus shares, the total number of shares will increase to 270 crore, and the share capital will also rise to ₹270 crore. The bonus shares will be issued from the company’s free reserves.
Free Reserves and Completion Timeline
- Free Reserves: As of March 31, 2024, NBCC India Limited has reserves and surplus amounting to ₹1,959 crore.
- Completion Timeline: The bonus shares are expected to be credited to shareholders’ demat accounts within two months from the board approval date, August 31, 2024. The entire process will be completed by October 31, 2024.
Impact on Shareholders
Number of Shares
For example, if you hold 10 shares before the bonus issue, you will receive 5 additional shares as a bonus (based on the 1:2 ratio). Thus, your total shareholding will increase to 15 shares.
Stock Price Adjustment
The stock price will be adjusted following the bonus ratio. For instance, if the pre-bonus price of the stock is ₹1,000, after the bonus issue, the adjusted price will be ₹666.67. The bonus increases the number of shares in circulation, thereby diluting the stock price proportionally.
Value of Investment
Despite the change in the number of shares and stock price, the total value of your investment remains the same. For example, if your total investment was ₹10,000 before the bonus issue, it will still be ₹10,000 after the bonus issue, assuming no other market changes.
Conclusion
In summary, the NBCC Share bonus issue will involve a 1:2 ratio, with a record date set for October 7, 2024. This will increase the total number of shares and adjust the stock price accordingly, but the overall value of your investment will remain unchanged.
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