Top Stocks Declaring Bonus Shares in July 2023

Amid challenging market conditions, inflation, and geopolitical tensions, listed Indian companies have devised a strategy to reward investors without straining their cash reserves: bonus shares.

The allure of receiving something for free, coupled with the satisfaction of earning a bonus, makes bonus share issues a welcome move for investors.

According to data available on BSE as of 21 June 2023, a remarkable 35 companies have already announced bonus shares in 2023.

Bonus shares are free shares that shareholders receive against shares they currently hold.

Following this pace of bonus issues, some companies have chosen December 2022 as their record date. Here are three stocks that will trade ex-bonus in July 2023.

#1 Roto Pumps

Leading the list is the engineering company Roto Pumps.

Roto Pumps is a leading manufacturer of positive displacement pumps. The company was founded in 1975 in India and has since become a global player in the pump industry.

On 24 May 2023, the board approved the proposal to recommend bonus shares in the ratio of 1:1. This means one bonus share of Rs 2 each for every one existing share.

The board has fixed 8 July 2023 as the record date to determine the eligibility of shareholders.

For the March 2023 quarter, Roto Pumps reported a revenue of Rs 719 m, up 46.2% YoY. The net profit for the same period came 57.9% higher on a YoY basis at Rs 110 m.

The growth in net profit and revenue was driven by strong demand for the company's products in the domestic and export markets.

The company has also recommended a final dividend of Rs 3 per equity share of face value of Rs 2 each for the financial year 2023.

Going forward, the company plans to launch new products in the coming quarters, including a new line of solar-powered pumps. The company is also developing new technologies for its pumps, such as wireless connectivity and remote monitoring.

For more details, see the Roto Pumps company fact sheet and quarterly results.

#2 Leading Leasing Finance and Investment company

Second, on the list is the finance company, Leading Leasing Finance and Investment.

Leading Leasing Finance and Investment Company (LLFIC) is a non-banking financial company (NBFC) that provides leasing and investment services. The company offers a variety of investment products, including fixed deposits, mutual funds, and insurance products.

The company's board announced bonus shares on 30 May 2023.

It will issue bonus shares in a ratio of 1:1. This means one new bonus share for every one existing share in the company.

The record date for the same is 20 July 2023.

For the March 2023 quarter, the company reported a revenue of Rs 8.7 m and a net profit of Rs 5.5 m. This was against the negative revenue of Rs 34 m and a net loss of Rs 3 m in the same quarter last year. The rise in revenue was due to better realisation.

Leading Leasing Finance and Investment Company (LLFIC) has not yet released any official information about its upcoming plans.

One area of focus for LLFIC is likely to be the expansion of its leasing business. The company has seen strong growth in its leasing business in recent years and will continue to focus on this area.

For more details, see the Leading Leasing Finance & Investment Co company fact sheet and quarterly results.

#3 Aptech

Last on the list is the software company Aptech.

Aptech is an Indian vocational training services provider. The company owns and franchises IT training centres in India and abroad.

On 26 May 2023, the board approved the issue of bonus shares in the ratio of 2:5 held. This means two bonus shares for every five existing shares.

The company has fixed 14 July 2023 as the record date for the split and bonus issue.

For the March 2023 quarter, Aptech reported revenue of Rs1.8 bn, up 170.8% YoY. The net profit for the same period came 30.6% higher on a YoY basis at Rs 333.5 m, driven by higher sales.

The company has also recommended an interim dividend of Rs 6 per equity share of face value of Rs 10 each for the financial year 2023.

Going forward, the company plans to be the expansion of its online training offerings. It further plans to improve its customer service.

The shares of the company have delivered multibagger returns to investors in the last one-year period, rising 129%. So far this year, the stock has jumped by 43%.

For more details, see the Aptech company fact sheet and quarterly results.

Conclusion

Investing in stocks that announce bonus shares can be an attractive proposition for investors as bonus shares enhance shareholder value by increasing the number of shares held without diluting ownership.

This can potentially lead to higher overall value in the long run.

Additionally, companies that issue bonus shares often have a history of profitability, increasing the likelihood of future dividend distributions, which can provide additional income to shareholders.

While bonus shares can be attractive, investors should consider other factors such as the company's overall financial health, growth prospects, and market conditions.

Dilution concerns and individual circumstances should also be considered.

For companies with a long history of issuing bonus shares, check out 5 Indian companies which have consistently declared bonus shares.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...