5 Stocks to Watch Out for Bonus Shares and Stock Splits in April 2023

Financial year 2023 is coming to a close. Employees are either rejoicing because of their appraisals or they're eagerly waiting for a big bonus cheque.

Just like employees look forward to their appraisals or bonus, investors also look forward to companies declaring bonus shares and stock splits.

A bonus share is an additional share of stock that a company issues to its existing shareholders at no cost, based on the number of shares they already hold. This means that an investor who holds 100 shares of a company receiving a 1:1 bonus share will now hold 200 shares without having to pay anything for the new shares.

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. For example, a company that has 1,000 shares trading at Rs 100 per share may decide to split its shares into 2,000 shares trading at Rs 50 per share.

Bonus shares and stock splits are exciting events for investors because they have a material impact on the company's stock price. Shares of the companies declaring bonus shares or stock splits continue to remain in focus for at least a month after their corporate action activity.

In today's article, we'll take a look at five companies to watch out in April 2023. These companies have either declared bonus shares or stock splits in April 2023.

#1 Jet Infraventure

First on the list is a Jet Infraventure.

Established in 2001, the company is engaged in the business of real estate development including construction. The company mainly works in Maharashtra and Gujarat on residential projects.

The company's board of directors on 09 March 2023 approved the proposal to recommend bonus shares in the ratio of 1:1. This means one bonus share of Rs 10 each for every one existing share.

Initially, the board had fixed 14 April 2023 as the record date to determine the eligibility of shareholders. The revised record date is 21 April 2023.

The smallcap company also decided to issue non-convertible redeemable cumulative preference shares at an issue price of Rs. 325/- (including a premium of Rs. 315/- per share). The company will issue 903,000 preference shares on a private placement basis.

The real estate company is going through a tough time this year. For the half year ended 30 September 2022, the company reported a total income of Rs 10.7 lakh, which is a sharp fall of around 66% on a YoY basis.

During the same period, it reported a total loss of Rs 22.8 lakh compared to a profit of Rs 0.4 lakh reported in the year-ago period.

For more details, see Jet Infraventure's financial fact sheet.

#2 Achyut Healthcare

Second on the list is Achyut Healthcare.

Achyut Healthcare is a pharma trading company. It focuses on dealing of APIs, pharma products, and medical devices.

The company's board announced bonus shares on 18 March 2023.

It will issue bonus shares in a ratio of 1:2. This means one bonus share for every two existing shares.

The record date for the same is 25 April 2023.

In FY22, the company posted massive jump in revenues at Rs 41.9 million (m). During the same period, it reported a profit of more than Rs 4 lakh. On a YoY basis, profit was up 279%.

The company is a newly listed company and has started to trade on the bourses since last year March 2022.

It's initial public offering (IPO) was open from 17 March 2022 till 30 March 2022. This was an SME IPO which received more than four times subscription.

Since its listing on exchanges in March 2022, the share price has rallied over 180%, giving multibagger returns.

#3 Shree Securities

Third on the list is Shree Securities.

An NBFC activity, the company also makes long-term and short-term investments in quoted as well as unquoted shares.

However, the company is solely concentrating on the NBFC segment right now and is registered as an NBFC with RBI, Kolkata.

The company's board on 23 March 2023 approved the stock split of shares in a ratio of 1:10. This means that each share of Rs 10, will now be converted into 10 shares of Rs 1 each. For example, if before stock split an investor had 10 shares of Rs 10, then after the stock split, he will have 100 shares of Rs 1.

During Q3 of FY23, the company reported a net profit of 1.2 m, up 105% YoY from Rs 0.6 m recorded in the year-ago period.

For more details, see Shree Securities' financial fact sheet and quarterly results.

#4 Deep Industries

Deep Industries operates as an oil & gas company.

The company focuses on air and gas compression, drilling, workover, exploration and production. It also has competence in integrated project management.

The company's board, on 19 January 2023, approved the stock split of the shares in a ratio of 1:2. This means that for each share of Rs 10, the investor will now get two shares of Rs 5.

The company reported a 757% YoY rise in revenues to Rs 1,000 m for the December 2022 quarter. The net profit for the same quarter came in at Rs 249 m, up 45% YoY.

The sharp rise in revenues can be attributed to a strong order book and increased government focus on increasing gas usage in the country.

According to the management, gas production in India is slated to increase by 18% CAGR till the financial year 2025, which may further boost the company's growing order book. With the acquisition of Dolphin, the group is set to expand its services portfolio to the offshore segment.

For more details, see the Deep Industries' financial fact sheet and quarterly results.

#5 Jost's Engineering

Incorporated in the year 1907, Jost's Engineering is engaged in the manufacturing of material handling equipment (MHD) and is the provider of a wide range of engineering products (EPD) solutions that find applications across diverse industries.

The company's board, on 27 March 2023, approved the stock split of the shares in the ratio of 1:2.5. This means for each share of Rs 5 will be converted into 2.5 shares of Rs 2 each.

After the split, all fractions resulting from the sub-division of equity shares shall be consolidated into whole equity shares and the same will be disposed of at the market price and the net proceeds (less expenses, if any) will be distributed proportionately, as far as practicable, to the members concerned.

For the quarter ended 31 December 2022, the company reported a total revenue of Rs 415 m, which is 19% higher on a YoY basis.

During the same period, its profit increased by 21% on a YoY basis to Rs 23 m.

With the government's renewed focus on incentivising the manufacturing sector, the logistics market will reap the benefits in the coming years which will boost the company's business. Growth in the e-commerce sector is also another significant demand driver for the company's products.

For more details, see Jost's Engineering financial fact sheet and quarterly results.

In conclusion...

It's important to remember that these corporate actions do not guarantee success and investors should conduct thorough research and analysis before making any investment decisions.

It's important to consider the company's financial health, market trends, and other factors that could impact the stock's performance.

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...