Shares of EIH Associated Hotels, the flagship company of The Oberoi Group, gained around 5 percent to hit 52-week high of Rs 892.60 on the National Stock Exchange (NSE) ahead of the company's board meeting on Friday, June 14.
The board will meet to consider and approve the issue of bonus shares to the equity shareholders of the company.
"The meeting of the Board of Directors of the Company will be held on Friday, June 14, 2024, to consider and recommend, interalia, capitalization of reserves by issuing Bonus Shares to the Equity Shareholders of the Company, subject to the approval of the Shareholders," EIH Hotels said in a filing to the exchanges earlier.
This will be the first-ever bonus share issue undertaken by the company, according to the data available on the exchanges.
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A bonus issue is the distribution of free shares by the company to the existing shareholders. A company may decide to distribute additional shares as an alternative to dividend payout.
The companies issue bonus shares to capitalise on their free reserves, increase their Earnings Per Share (EPS) and paid-up capital, along with reducing the reserves.
Shareholders are issued bonus shares at no additional cost and hence are also known as free shares. Only those investors will be eligible for bonus shares who will buy the stock before the ex-date. If an investor purchases the shares on the ex-date or after that, they will not be eligible to get bonus shares.
EIH Associated Hotels is part of the Oberoi Group which owns and manages 20 hotels under the luxury Oberoi Hotels & Resorts brand and 10 five-star properties under the Trident Hotels brand.
Additionally, the company provides services in flight catering, airport restaurants, travel and tours, car rentals, project management, and corporate air charters.
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At 9:56 am, EIH Hotels shares were trading 3.8 percent higher at Rs 878.70 on NSE. In the last one year, the stock has soared 68 percent, outperforming benchmark Nifty 50 which has risen around 24 percent during this period. So far in 2024, the stock has delivered handsome return of over 86 percent.
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