Shakti Pumps stock price

Shakti Pumps Announces 5:1 Bonus Share Issue: Key Details and Impact

In a major announcement set to boost investor confidence, Shakti Pumps (India) Limited has revealed a 5:1 bonus share issue. This means that for every single share held by existing shareholders, they will receive five additional shares, provided shareholder approval is secured. The record date for determining eligibility has been set for October 7, 2024, with the bonus issue subject to approval through a postal ballot process.

What Does the 5:1 Bonus Share Issue Mean for Investors?

The 5:1 ratio signifies that for every existing share in Shakti Pumps, shareholders will receive five new, fully paid-up shares. This move is expected to increase the liquidity of the stock while also making shares more affordable to a broader range of investors. The board of Shakti Pumps officially made the announcement during a virtual meeting on Monday, October 7, 2024.

In their official exchange filing, Shakti Pumps stated:
“The Board of Directors of Shakti Pumps (India) Limited at its meeting held today, through video conferencing, recommended the issue of bonus shares in the ratio of 5:1, subject to the approval of shareholders via a postal ballot process.”

Record Date and Shareholder Approval

While the record date for determining eligible shareholders is tentatively set for October 7, 2024, the final date will be declared in due course. The issuance of bonus shares is contingent upon approval from the company’s shareholders, who will cast their votes through a postal ballot.

Increase in Authorized Share Capital

In addition to the bonus share issue, Shakti Pumps also approved a significant increase in its authorized share capital during the same meeting. The authorized share capital has been increased from ₹40 crore to ₹190 crore, which will allow the company to issue more shares as it expands its operations and financial capabilities.

Shakti Pumps’ Previous Bonus Share Issuance: A Look Back

This is not the first time that Shakti Pumps has rewarded its shareholders with bonus shares. The company previously issued a 1:1 bonus back in 2011, a move that contributed to strong investor trust and growth in stock value. According to data available on Trendlyne, Shakti Pumps’ stock has multiplied five times over the past year, delivering impressive multibagger returns of 318% in the current calendar year alone and 197.5% over the last six months.

Current Stock Performance

Despite the promising news, Shakti Pumps stock price, shares of Shakti Pumps closed 5% lower today, ending at ₹4,309.40 on the Bombay Stock Exchange (BSE). While this dip may seem concerning, such fluctuations are common in the stock market and often reflect profit-booking by investors in the short term. The long-term outlook, however, remains strong, particularly given the company’s consistent performance and its attractive bonus share issue.

Conclusion:

The 5:1 bonus share issue from Shakti Pumps marks an exciting opportunity for shareholders, enhancing liquidity and reinforcing investor confidence. With a history of strong stock performance and multibagger returns, the company continues to reward its shareholders. As we await final shareholder approval, the outlook for Shakti Pumps remains robust, driven by strategic moves like the bonus share issuance and the increase in authorized share capital.