5 Stocks to Watch out for Bonus Shares and Stock Splits in January 2023

A sell-off in equities triggered by fears of faster interest rate hikes and escalating geopolitical tensions in Eastern Europe put investors in a bind in 2022.

As a result, investors gobbled up rewarding stocks by dumping shares of high-growth technology stocks for safer investment in more established industries.

These rewards were in the form of dividends or extra shares. To reward the shareholders with this extra shares, more than 140 companies have declared bonus shares.

Stocks splits have also been in rage with the world's valuable companies announcing stock splits.

Here are five stocks that will trade ex-bonus, ex-split in January 2023.

#1 Supreme Petrochem

First on our list is the Supreme Petrochem.

Supreme Petrochem is the largest producer and exporter of Polystyrene Polymer in India with a market share of 55%.

Apart from manufacturing polystyrene products, it also trades in the raw material used to make polymers.

On 9 December 2022, the board decided to split the company's shares in a 1:2 ratio. This means that a fully paid-up equity share of face value of Rs 4 will be split into fully paid-up equity shares of Rs 2 each.

The board has fixed 6 January 2023 as the record date to ascertain the eligibility of shareholders for sub-division/split.

Supreme Petrochem reported a 3.6% YoY jump in revenue to Rs 12.3 bn for the September 2022 quarter. The net profit for the same period came in 53.1% lower at Rs 596.5 m.

The muted growth in revenue was on account of lower volume offtake as well as subdued realizations. Also, the rise in raw material costs and other expenses pulled the profit lower.

For the financial year 2023, it is investing heavily to increase its production capacity. The company has invested close to Rs 12 bn to cater to the growing demand for polystyrene products.

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

#2 Vishnu Chemicals

Second, on the list is Vishnu Chemicals.

The company manufactures and sells of a wide range of specialty chemicals. Its products include Sodium Dichromate, Potassium Dichromate, Basic Chromium Sulphate and Yellow Sodium Sulphate.

On 14 December 2022 the board decided to split the shares of the company in a ratio of 1:5. This means one equity shares with a face value of Rs 10 each will be divided into five equity shares with a face value of Rs 2.

The board has fixed 13 January 2023 as the record date for the split.

For the September 2022 quarter, the company's revenue rose by 54.5% YoY to Rs 3.7 bn. Net profit also climbed 111.2% YoY to Rs 351.2 m. This rise was based on a diversified product and application mix increasing the export number.

For the coming quarter, the company is working on brownfield expansion to introduce a new specialty chemical to aid barium portfolio diversification.

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

#3 Globe Commercials

Third on the list is Globe Commercials.

The company is in the business of providing commodity trading services. It focuses on buying and selling sanitary wares, cotton, oils, rubbers, grains, seeds, vegetables and much more.

The board of directors of the company on 14 December 2022, approved the proposal to recommend the issue of bonus shares in the ratio of 1:1. One bonus share will be issued for every one existing share.

The board has revised the record date for the bonus from 22 December 2022 to 7 January 2023 to determine the eligibility of shareholders.

For the September 2022 quarter, the company's revenue climbed 59.1% YoY to Rs 357 m.

The net profit stood at Rs 4.4 m, down 51% YoY. This decline was due to an increase in the expenses of the trades.

For the coming quarter, the company is working to reduce expenses and expand its business reach.

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

#4 G M Polyplast

Fourth on the list is G M Polyplast.

The company is engaged in manufacturing and supplying high-grade sheets and granules.

Its product range includes rolls, amorphous polyethene and other recycled polyethene sheets.

The board has approved a bonus issue on the back of robust results declared by the company. The bonus shares will be issued in the ratio of 6:1, that is, six equity shares for every one existing share.

The board has fixed 4 January 2023 as the record date to deterine the eligibility of shareholders.

For the September 2022 quarter, the company reported a 45% YoY jump in revenue to Rs 434.5 m. The net profit for the same period came in 44% higher at Rs 25.3m.

To increase reach in the premium segment, it is planning to make premium quality recycled sheets and granules by clearing plastic scrap.

For more details see the G M Polyplast company fact sheet and quarterly results.

#5 KPI Green Energy

Last on the list is KPI Green Energy.

KPI Green Energy also known as KPI Global Infrastructure is a solar power generating company focused on providing solar power as an Independent Power Producer (IPP) under the brand name Solarism.

It also develops, transfers, operates, and maintains grid-connected solar power projects for CPP customers and generates revenue by selling these projects to CPP customers for their captive use requirements.

The board has approved a bonus issue on the back of strong results declared by the company. The bonus shares are approved in the ratio of 1:1, that is, one equity share of Rs 10 for every one existing share of Rs 10.

The board has fixed 18 January 2023 as the record date to determine the eligibility of shareholders.

In the September 2022 quarter, the company's revenue grew by 177.6% to Rs 1.6 bn. Net profit came in 72.6% higher at Rs 186.6 m, compared to Rs 211.5 m last year. The growth was on the back of the rise in revenue due to an increase in realisation.

For the coming quarters, the company is focused on increasing the order book.

For more details, see the KPI Green energy fact sheet and quarterly results.

Should you invest in stocks announcing bonus shares and stock splits?

Bonus issues and stock splits have a similar impact on a company's shares. Without significantly altering the company's fundamentals, both lead to an increase in shares.

But it is important to consider that while stock splits and bonus shares increase the total number of shares, their market value also decreases. However, this should not be interpreted as a drawback of stock splits and bonuses. This will, in turn, increase its trading volume.

It may result in long-term advantages for a specific corporate stock. The more demand there is, the more the price appreciation and the quicker it occurs.

While these may not immediately bring value, they have a promising future.

It should be noted that while profit will stay the same after the company issues bonus shares, its earnings per share (EPS) will decrease.

Despite its advantages and drawbacks, it is worth looking into companies doing bonus shares and stock splits.

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...