Seamless pipes and tubes manufacturer Maharashtra Seamless Ltd on Monday said its board of directors at the meeting has recommended the issuance of bonus of equity shares of the company.
In a regulatory filing, the company said it would issue shares in the ratio of 1:1, i.e., one new bonus equity share for one existing equity share, which is subject to the shareholders' approval.
It said the bonus shares will be issued from capital redemption reserve and securities premium reserve. The record date will be intimated in due course, it said.
Pre-bonus issue paid-up share capital is Rs 33,49,98,130 divided into 6,69,99,626 equity shares of Rs 5 each and post-bonus issue paid-up share capital shall be up to Rs 66,99,96,260 divided into 13,39,99,252 equity shares of Rs 5 each.
The bonus shares once allotted shall rank pari-passu in all respects and carry the same rights as the existing equity shares and shall be entitled to participate in full in any dividend and other corporate action, recommended and declared after the new equity shares are allotted, the company added.
Bonus share issues are usually used by companies to encourage retail participation. By increasing the number of outstanding shares, the stock price decreases, making it more affordable for retail investors.
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