4 Stocks to Watch Out for Bonus Shares and Stock Splits in March 2024

The Indian stock market is on fire! The Nifty 50 just hit a record high, fueled by financials, energy stocks, and even a rebound by ITC. It's the sixth time this year the benchmark index has reached new heights.

Picture this: amidst such a booming market, the prospect of receiving something for free that could potentially double your account gains. Now that is bonus.

In investing world these value-boosting incentives come in the form of bonus shares and stock splits. Such corporate actions often become magnets for investors seeking to capitalize on opportunities that enhance the overall value of their portfolios.

A bonus share is an additional share that a company issues to its existing shareholders at no cost, based on the number of shares they already hold.

On the other hand, a stock split is when a company divides its existing shares into multiple shares while maintaining the overall value of the shares.

Bonus shares and stock splits are exciting events because they have a material impact on the company's stock price.

In today's article, we'll take a look at three companies doing bonus shares or stock splits in March 2024.

#1 Capri Global Capital

First on the list is Capri Global Capital.

Capri Global is a diversified non-banking financial company (NBFC) with a presence across different segments like MSME, construction finance, affordable housing and indirect retail lending segments.

The company has approved a bonus issue of shares as well as a split of its equity shares after its December quarter results.

The company has announced a bonus issue of shares in a 1:1 ratio, wherein shareholders will receive one free share for every one they hold as of the record date, which will be determined at a later date.

Capri Global Capital will utilise Rs 412.4 m from the balance in the securities premium account for the bonus issue of shares. As of 31 March 2023, the company had Rs 1.9 bn in the securities premium account.

This is the first instance of the company issuing a bonus share.

Additionally, the board has also approved splitting one share with a face value of Rs 2 each into two shares with a face value of Rs 1 each. The company had last split its stock in November 2016, wherein one share of Rs 10 was split into five shares of Rs 2 each.

For the December quarter, Capri Global reported a 54% jump in its Assets Under Management (AUM) to Rs 133.6 bn, while disbursements almost doubled, rising 91% from the same quarter last year.

Gross Stage 3 assets for the company stood at 2.1%, a marginal increase from 1.9% in the September quarter. Provision Coverage Ratio on the stage 3 assets stood at 34.7% from 32.2% in September.

The company has fixed 5 March 2024 as the record date for bonus and stock split.

Going forward, the company is targeting assets under management (AUM) of more than Rs 150 bn with a 33% or Rs 50 bn contribution from the gold loan book for the financial year 2025.

For more details, see the Capri Global Capital company fact sheet and quarterly results.

#2 Paisalo Digital

Second on the list is Paisalo Digital.

Paisalo Digital is a non-banking financial company engaged in providing loans. It is primarily focusing on financing self-employed borrowers.

The company operates through three divisions, namely financial services division, microcredit division and alternate energy.

In a meeting on 31 January 2024, the company's board approved the issuance of bonus shares in a 1:1 ratio, meaning one new bonus equity share of Re 1 each will be given for every existing equity share of Re 1 each held by shareholders as of the record date.

The company's board fixed 20 March 2024 as the record date for the proposed bonus issue of equity shares.

The company reported net sales of Rs 1.8 bn in the December 2023 quarter, up 49.3% from Rs. 1.2 bn in the December 2022 quarter. Its net profit jumped 102.4% from Rs 278.9 m in Q3FY23 to Rs 564.6 m in Q3FY24.

In the latest development, Paisalo Digital zoomed 13.7% on 19 February after the NBFC announced that its will consider raising funds in its meeting on Wednesday, 21 February 2024, on a private placement basis.

The funds will be raised by issuance (allocation) of non-convertible debt securities/instruments.

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

#3 Manorama Industries

Third on the list is Manorama Industries.

The company is engaged in the business of manufacturing, processing, and supplying speciality fats and oils. They sell products within the nation as well as in foreign nations and have a diverse product range, such as oils, butter, and several other tailor-made products.

According to details available on the BSE website, Manorama Industries shares will split in the ratio of 5:1, meaning each equity share will split into 5 shares.

The current face value of each equity share of Manorama Industries is Rs 10. Once the split takes effect, the new face value of each stock of Manorama Industries will be Rs 2.

The record date for the same is 8 March 2024.

The company reported net sales at Rs 984.5 m in the December 2023 quarter, up 3.2% from Rs 953.8 m in the December 2022 quarter.

Net profit for the quarter came in at Rs 74.4 m in the December 2023 quarter, up 3.9% from Rs 71.6 m a year back.

Further, with an estimated capital expenditure of Rs 650 m earmarked for setting up new capacity for fractionation and refinery processes, the company is gearing up for a significant leap forward.

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

#4 Tiger Logistics.

Last on the list is Tiger Logistics.

Tiger Logistics India is a leading international logistics company and solution provider covering freight forwarding, transportation and customs clearance.

With an asset-light model, Tiger Logistics works with partners across the board to deliver timely movement of cargo around the world, according to its website.

The board of international logistics firm Tiger Logistics (India) had approved a proposal to split its shares in the proportion of 1:10.

This means each Equity Share has a face value of Rs 10 each into 10 (Ten) Equity Shares having a face value of Rs 1 each.

The record date for the same has been set as 4 March 2024.

For the December 2023 quarter, its revenue from operations came in at Rs 519.5 m, down 36% from Rs 828.2 m a year back.

Profit for the quarter came down to Rs 36 m from Rs 82.7 m a year back.

The company was recently awarded another government tender from Hindustan Petroleum Corporation, marking a significant milestone to enter the petro segment.

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

Should You Invest in Stocks Declaring Bonus Shares and Stock Splits?

Investing in stocks that announce bonus shares and stock splits can be an appealing option for some investors.

These actions can increase liquidity, generate positive market sentiment, and potentially make the stock more affordable for a wider range of investors.

However, it does not guarantee profitability in all cases. One drawback to consider is the potential dilution of earnings per share if the company's profits do not increase proportionally.

Therefore, it's important to consider the company's fundamentals, such as financial performance and growth prospects, before making investment decisions solely based on bonus shares and stock splits.

Dilution concerns and individual circumstances should also be considered.

For the companies with 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...