Posts Tagged ‘equity capital’

Domestic Economy Rolls as Corporate India Offers 40% More Bonus Shares

Domestic Economy Rolls as Corporate India Offers 40% More Bonus Shares

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Issue of bonus shares by Corporate India to its shareholders in the first 10 months of the fiscal has shot up 40% over the total during the fiscal ended March ‘09, after declining for two straight years.

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This interesting jump in bonus issues indicates positive sentiment of the corporate sector to serve a larger equity base.

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Companies like Britannia, TCS, Reliance Industries, Adani Enterprises, Jindal Steel, Divi’s Lab, JP Associates etc  have  issued bonus shares in the April ‘09-January ‘10 period.

There are as many as 61 companies which have done so.

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Jagannadham Thunuguntla, equity head with Delhi-based merchant bank SMC Capitals, said:  “The increase in companies doling out bonus equity to its shareholders reflects that the domestic economy is on the path of recovery.”

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Corporate India has got the confidence to expand equity capital base and issue bonus shares owing to the fact that they have performed very well this fiscal.

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Bonus issue is an offer of free additional shares to existing shareholders.

This is one of the ways of rewarding shareholders, who largely benefit from capital gains.

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A company may decide to distribute further shares as an alternative to increasing the dividend payout.

It is also known as a “scrip issue” or “capitalization issue”.

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The number of companies issuing bonus shares declined more than a quarter after hitting a peak in 2006-07 to 72 firms in 2007-08 and shrunk further to just 44 companies for the year ended March ‘09.

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This came after three consecutive years of rise in number of bonus issues, when more listed firms announced a bonus bonanza in line with the bull run of the stock market.

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Bonus shares are issued by companies through capitalization of their free reserves.

When a company announces bonus issue, it is an indication of its management’s confidence to serve a larger equity base.

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🙂

CESC Bags 140 mw Hydro Power Project in Himachal

CESC Ltd, the Power utility, has bagged a hydro power project from the Himachal Pradesh government on a competitive bidding process. The company has been allocated one project in Himachal Pradesh at Lara Sumta, Vice Chairman Sanjiv Goenka told.

He also said that the company would make an investment of Rs 46 billion as equity component in its power projects over the next 4-5 years and would require about Rs 100 billion as debt component for its projects.

CESC currently trading marginally lower by 0.58% at Rs 393.05. The stock hit an intraday high of Rs 396.90 till now, as against the 52-week high of Rs. 410. The stock hit a low of Rs 392 during the day. The stock had hit a 52-week low of Rs 180 on 12 March 2009.

The stock opens at Rs. 395.05 at BSE. The total traded volume of the scrip on BSE till now stood at 14147.

Meanwhile today, the BSE Sensex is trading with marginal losses of 7.42 points, or 0.04%, at 17,111.61. It has touched an intraday high of 17,275.19 and low of 17,068.37.

On BSE, 2,876 lakh shares were traded in the counter and out of that 1,110 stocks are in positive while 1,703 stocks are on he sellers” radar.

AB Nuvo has an equity capital of Rs 125.60 crore as of March 2009. The face value per share is Rs 10. At the current price of Rs 393.05, the P/E multiple stood at 11.99 with book Value of 233.87 and P/BV at 1.68.

Considering the current price, the stock had outperformed the market over the past one month till 13 November 2009, rising 5.26% as compared to the Sensex”s return of 1.55% and NSE Nifty”s of 2.09% return. It outperformed the market in past one quarter ending September 14, 2009, gaining 10.14% as against 5.53% rise in the Sensex and 6.13% rise in NSE Nifty.

CESC is a fully integrated power utility with its operation spanning the entire value chain: right from mining coal, generating power, transmission and distribution of power. We serve 2.3 million customers within 567 square kilometers of Kolkata and Howrah, delivering safe, cost-effective and reliable energy to our consumers. Even after 100 years of service, we still feel younger than ever.

The Company has posted a net profit after tax of Rs 1260 million for the quarter ended September 30, 2009 as compared to Rs 1240 million for the quarter ended September 30, 2008. Total Income has increased from Rs 7860 million for the quarter ended September 30, 2008 to Rs 9850 million for the quarter ended September 30, 2009.