Multibagger stock plunges on record date of bonus shares issue
Premium- The company's board of directors considered, approved and recommended issue of bonus shares in 3:1 ratio
Shares of Avantel Ltd plunged more than 4% to ₹273 apiece on the BSE on the record date for its 3:1 bonus shares issue. The stock started trading ex-bonus on Friday, June 17, 2022. Bonus shares are fully paid additional shares issued by a company to its existing shareholders.
The board of directors last month had considered, approved and recommended issue of (3:1) 3 bonus shares for every 1 equity shares held by the equity shareholders of the company as on a Record Date. The company had set Monday, June 20, 2022 as the record date to ascertain the eligibility of shareholders entitled to the issuance of bonus shares.
The Bonus shares once allotted shall rank pari-passu in all respects and carry the same rights of the existing Equity Shares and shall be entitled to participate in full in any dividend and other corporate action, recommended and declared, if any, after the issue and allotment of such bonus shares, the company added.
The bonus shares will be credited/ dispatched within 2 months from the date of Board approval i.e., by July 06, 2022, Avantel informed further in the exchange filing.
The Bonus equity shares will be issued out of free reserves, retained earnings and securities premium account, available as at March 31, 2022. As on March 31, 2022, the free reserves, retained earnings and securities premium account is ₹79,66,44,996, as per the company's statement.
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Avantel is a satellite communication and wireless system provider, offering telecom products and software solutions. Avantel shares have given multibagger return in a year by rallying more than 110% in a year's period whereas the stock is up about 59% in 2022 (year-to-date or YTD) so far.