IGL rewards investors with first-ever 1:1 bonus share issue

Indraprastha Gas Ltd (IGL) on Tuesday announced a 1:1 bonus share issue, with shareholders set to receive one fully paid-up equity share of ₹2 face value for every existing share held.

The decision was approved at a board meeting held earlier in the day, the company said in a regulatory filing.

The bonus issue will result in the issuance of 70 crore new equity shares, doubling the company’s paid-up share capital to ₹280 crore from the existing ₹140 crore. The bonus shares will be funded from free reserves, which stood at ₹8,411.74 crore as of March 31, 2024, according to the company.

To accommodate the bonus issue, IGL’s authorised share capital will be increased from ₹220 crore to ₹1,000 crore, requiring amendments to the company's Memorandum of Association. Both the bonus issue and the capital increase are subject to shareholder approval.

The company expects to credit or dispatch the bonus shares within two months, by February 9, 2025.

"This strategic decision further underscores the company's unwavering commitment to enhancing shareholder value while reinforcing investor confidence in IGL's robust financial performance and future growth trajectory," IGL later said in a statement.

The record date for determining eligible shareholders will be decided later.

"This announcement aligns with IGL's enduring philosophy of rewarding its shareholders, underpinned by strong financial fundamentals and consistent growth," the firm said.

IGL, a leading city gas distribution company, is primarily engaged in supplying piped natural gas (PNG) to households and industrial units and compressed natural gas (CNG) for vehicles.

This is IGL’s first bonus issue. Earlier, in 2017, the company announced a stock split. Each share with a face value of ₹10 was divided into 5 units with a face value of ₹2 apiece.

The approval comes amid a back-to-back reduction in its domestic gas allocation, which is expected to impact IGL’s operations and sales.

The bonus issuance not only reflects the company's healthy reserves but also its optimism in sustaining its leadership position in India's clean energy ecosystem, IGL said.

Kamal Kishore Chatiwal, Managing Director, IGL, said, "The bonus share issue is a testament to our continued focus on creating long-term shareholder value. I reinforce our confidence in the company's potential to scale new heights while rewarding our investors for their unwavering trust and support."

Shares of IGL were trading at ₹386.10 on the BSE at the time of filing this report.