Auto components company Bharat Gears Ltd (BGL) rose more than 17 percent on the BSE in Tuesday’s intraday trading as the company began trading ex-bonus, a day before the record bonus issue date for the company’s shares. company.
Bharat Gears announced bonus shares with a ratio of 1:2. Simply put, the company will award eligible shareholders one bonus share in addition to the existing two shares. Among the bonus shares, a total of 51,18.35 shares with a nominal value of Rs. 10 each are proposed to be issued.
Ex-bonus date is an important day for investors to qualify for bonus shares. To qualify for bonus shares, an investor must purchase a company’s stock at least one or two days before the ex date. This is due to the T+1 and T+2 settlement cycles.
In general, a publicly traded company pays out bonus shares on their existing shares to current shareholders for free. A listed company issues bonus shares due to free reserves and surplus and adding fresh capital. The face value remains the same problem after the bonus.
The company has set September 28 as the record date to determine which shareholders are eligible for the bonus issuance. The company plans to pay out the bonus shares within two months from the date of board approval on August 24, 2022.
“We would like to inform you that the members of the Company, in their Annual General Meeting of Tuesday, September 20, 2022, have, among other things, considered and approved the issuance of Bonus Shares to the members of the Company through reserve capitalization. in the ratio of 1:2, ie issuance of one share share for every two shares held by the members whose names are included in the register of members or as the beneficial owner(s) of the shares of the company, in the administration of the custodians, at the close of business on the Record Date September 28, 2022,” the company said in an application for the stock exchange.
The free reserves bonus of the company is more than Rs 5.1 crore. As of March 31, 2022, the company has free reserves of more than Rs 5.8 crore. After the bonus issuance, the share capital of the company is expected to exceed Rs 15.35 crore as compared to the current share capital of more than Rs 10.2 crore (pre-bonus issuance scenario). Bonus shares are fully paid additional shares issued by a company to its existing shareholders.
Bharat Gears Ltd (BGL), promoted by Bharat Steel Tubes and Raunaq & Company in association with ZF Friedrichshafen Germany, was founded in 1971 to manufacture automotive gears. The foreign employee has a 25.99 percent interest in the company. BGL has two divisions, namely Automotive gears and Industrial Furnaces division, with the former contributing approximately 92 percent of sales and the latter contributing the rest.
The automotive gear division produces a wide variety of gears – hypoid gears and differentials that go into shaft assemblies and gears and shafts with parallel shafts that make up the gearbox assemblies. This division supplies OEMs in the tractor, truck and bus and commercial vehicle industries. The company also serves the replacement market and exports to the overseas market. BGL’s two gear factories were located in Mumbra (Thane Dt) Maharashtra and Faridabad Haryana.
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