Now Reading: Chavda Infra announces 1:1 bonus share issue, capital hike to Rs 70 crore
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Chavda Infra announces 1:1 bonus share issue, capital hike to Rs 70 crore
Chavda Infra announces 1:1 bonus share issue, capital hike to Rs 70 crore
Chavda Infra has announced a 1:1 bonus share issue for existing shareholders, subject to approvals, and an increase in authorised capital from Rs 35 crore to Rs 70 crore. The Hindu Business…
The Story in Brief
Chavda Infra has announced a 1:1 bonus share issue for existing shareholders, subject to approvals, and an increase in authorised capital from Rs 35 crore to Rs 70 crore. The Hindu Business Line reports that shareholders have already approved the bonus issuance via postal ballot. The bonus issue will involve allotment of 3.26 crore equity shares of face value Rs 10 each, increasing paid-up capital from Rs 32.66 crore to Rs 65.31 crore.
The company, which focuses on real estate and construction in Gujarat, decided against declaring a dividend, choosing instead to retain profits for expansion. It recently secured a Rs 89 crore contract from ADI Shantigram Abode LLP, an Adani group firm, for a residential project at Adani Shantigram Township, Ahmedabad. The stock, listed in October 2023, is currently trading 36% below its all-time high of Rs 209.
The Indian Opinion
Bonus issues often fuel a 'free shares' narrative, but they merely split equity without creating value. Chavda Infra's decision to retain profits rather than pay a dividend, along with its stock trading 36% below its peak, suggests caution. The real test will be how the company deploys the retained earnings and executes its Rs 89 crore Adani project. Investors should watch next quarter's cash flow, not just the bonus ratio.
Sources (2): livemint.com, thehindubusinessline.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
