Bonus Shares Alert: REC to Turn Ex-Bonus Soon

Indian companies are giving out bonus shares in record numbers.

So far, in 2022, 73 companies have announced bonus issues. This is the second highest number since 2010.

Some companies have set their record dates in August. One of them is REC.

Here is what you need to know...

• REC announced bonus shares on 30 May 2022.
• It will issue the bonus shares in the ratio of 1:3. This means one bonus share for every three existing shares.
• The record date for the same is 18 August 2022.

Previously the company had done a bonus issue in 2016. It issued bonus shares in the ratio of 1:1.

The issue of bonus shares will increase the liquidity of the stock. This will decrease the share price and make it more affordable for investors.

A look at the financials

For the financial year 2022, the company's revenue was up 11% YoY at Rs 392 bn. Net profit saw a 20% YoY growth and came in at Rs 100 bn.

This was on the back of three big projects. The total value of these projects' was Rs 25 bn.

The company also declared a final dividend of Rs 4.8 per share.

Over the last five years, REC's revenue has grown at a CAGR of 8.6% while net profit has grown at 8% CAGR.

The rise in the demand for loans was the key driving factor of the growth.

REC'S Financial Snapshot - 5 years

Particulars	2017-2018	2018-19	2019-20	2020-21	2021-22
Total Revenue (Rs in m)	226,621	254,241	299,789	355,646	393,392
Growth (%)	10	12	17	18	10
Operating profit (Rs in m)	192,719	236,957	259,466	322,587	344,413
Operating profit margin (%)	85.5	93.7	87.1	91.8	87.9
Net profit (Rs in m)	63,134	44,505	57,414	49,723	83,782
Net profit margin (%)	26.1	19.6	22.6	16.6	23.6

Data source: Equitymaster

How shares of REC have performed recently

REC's share price is up 2.3% in the past month.

However, the shares are down 12.9% over the year. On a YTD basis, the shares are trading lower by 1.3%.

REC is one of the best midcap stocks but has fallen due to volatility in the market.

The stock touched its 52-week high of Rs 168.9 on 14 October 2021. Its 52-week low was Rs 109.7 on 20 June 2022.

REC is currently trading at a PE (price to earnings) multiple of 2.5 times. The company is undervalued on the PE front.

The industry PE multiple is 3.4.

About REC

REC is the public infrastructure finance company in India. It's a public sector undertaking (PSU) company. The company is engaged in the financing and promotion of transmission distribution projects throughout India.

Their main objective is to finance and promote rural electrification projects all over the country.

It's the Navratna company under the Ministry of Power.

For more details, check out REC's factsheet and its quarterly results.

To know more, check out REC's news and analysis.

You can also compare REC with its peers.

REC vs Power Finance corporation

REC vs PTC India Financial

REC vs AKME Star

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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...