Bonus shares alert: Kothari Products announces 1:1 bonus issue for its shareholders; check details

The fertilisers manufacturing company informed the stock exchanges in a filing that its board of directors has recommended the issue of bonus shares in the ratio of 1:1, subject to the shareholder's approval through a Postal Ballot.

This means the existing shareholders will get one bonus share for each share of Kothari Products they hold as of the record date. This will be the company’s first bonus issue in nearly a decade, after it approved a bonus issue of 1 free share for two shares held by the investors in November 2015.

While the record date for the bonus share issue has not been revealed by the company yet, the estimated date by which bonus shares would be credited or dispatched to the eligible shareholders will be March 12, 2025.

The bonus shares will be issued from the free reserves created out of the company’s profits. The free reserves required for implementing the bonus issue is ₹29.84 crore, while the post-bonus issue paid-up capital is estimated to be over ₹59.68 crore, the company informed the bourses.

Kothari Products’ board of directors has decided to increase the company’s authorised share capital to ₹61.5 crore from the existing ₹31.5 crore once it is approved by the members through Postal Ballot.

Adesh Tandon, a Practicing Company Secretary, has been appointed the Scrutiniser for the said postal ballot process by the board.

Shares of Kothari Products surged almost 7.6% on Monday to hit an intraday high of ₹210 per piece on the NSE. However, the stock pared some of its early gains to trade 3% higher at ₹201.07 apiece on the NSE at 3 p.m. The stock has gained 20% in the last three months and is up almost 45% over a six-month period.

So far in calendar year 2024, the fertilisers manufacturing stock has jumped 60%, rising 56% in the last year.

Kothari Industrial Corporation Ltd is primarily engaged in the manufacturing and mixing of fertilisers. It also provides drone services and its operations include hotels, footwear and leather businesses.