EIH Hotels' shares surge 5% to record high as board considers first bonus issue

The flagship company of The Oberoi Group, EIH Associated Hotels’ share price surged 5% to reach a 52-week high of ₹892.60 apiece on the NSE. This rise in the stock price comes immediately after the company’s board meeting scheduled for 14 June, 2024.

"The meeting of the Board of Directors of the Company will be held on Friday, June 14, 2024, to consider and recommend, capitalization of reserves by issuing Bonus Shares to the Equity Shareholders of the Company, subject to the approval of the Shareholders," EIH Hotels said in a filing to the exchanges earlier.

The distribution of free shares by the company to the existing shareholders is known as bonus issue. A company may decide to distribute additional shares as an alternative to dividend payout. The companies increase their earnings per share (EPS) and paid-up capital, along with reducing the reserves. The investors who will buy the stock before the ex-date will be eligible for the bonus shares.

The shares of EIH Associated Hotels have exhibited a robust performance for the last year. The stock surged 68%, significantly outperforming the benchmark Nifty 50 index, which saw a rise of around 24% during the same period. The anticipation of the bonus issue has likely contributed to this upward trend of the stock today. At 1:03 PM, shares of EIH Limited closed 3.54% higher at ₹442 apiece on the NSE.

About EIH Associated Hotels:

EIH Associated Hotels is an entity within The Oberoi Group, a leading player in the luxury hospitality sector. The group owns and manages 20 hotels under the Oberoi Hotels, whereas, resorts brand and 10 five-star properties under the Trident Hotels brand. Apart from the hotel operations, the company is involved in flight catering, airport restaurants, car rentals, ancillary services, travel and tours and corporate air charters.