Bonus Issue: Microcap Company Gujarat Toolroom (Gujarat Toolroom) has announced a bonus issue. The company has given this information in its exchange filing today on January 6. According to the filing, its shareholders will be issued bonus shares in the ratio of 5:1. This means that eligible shareholders will get five bonus shares for every one share held. The Board of Directors of Gujarat Toolroom met today on Monday and announced the company’s first bonus share issue. A decline of 4.95 percent was seen in the company’s shares today and the stock closed at Rs 18.04 on BSE.
Company gave information in exchange filing
Gujarat Toolroom said in an exchange filing on Monday that its board has recommended the issue of bonus shares in the ratio of 5:1 to eligible equity shareholders. Under this, for every existing fully paid-up equity share of Re 1, 5 new fully paid-up equity shares of Re 1 will be issued.
The company told the exchanges that approval from members is yet to be received. The bonus shares are likely to be credited on or before March 6, 2025. Apart from the bonus issue, Gujarat Toolroom has approved increasing its authorized share capital from ₹100 crore to ₹140 crore.
Why are bonus shares issued?
Bonus shares are given free of cost by a company to its existing shareholders. It is generally given to increase the earnings per share of the company, increase the capital base and reduce the free reserves. These shares are issued at no additional cost to the shareholders and hence are also called free shares.
Earlier, Gujarat Toolroom had recently raised ₹95.66 crore from Qualified Institutional Placement (QIP). In this, stakes were allotted to leading institutional players like Bridge India Fund, Eminence Global Fund and Multitude Growth Funds Limited.
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