Karur Vysya Bank on July 24 announced a bonus issue of shares in the ratio of 1:5 for its shareholders. This marks the first bonus issue announced by the private lender in nearly seven years.
Eligible shareholders would receive one bonus share for every five shares of the company they own, as on record date. "Issuance of Bonus equity shares in the proportion of 1 :5 i.e. 1 (one) equity share of face value Rs 2/- each for every 5 (five) fully paid-up equity share of Rs 2/- each held by the members of the Bank as on the Record Date, subject to the approval of the members of the Bank at the ensuing AGM and other statutory and regulatory approvals, if any," the private lender said in its exchange filing.
Record date for bonus issue:
Karur Vysya Bank has set August 26 as the record date to determine the eligibility of the shareholders set to receive the bonus issue. This means that bonus shares will be handed over to those shareholders who own shares of the company as on August 26.
Karur Vysya Bank bonus issue history:
If approved, this would mark the fourth bonus issue delivered by the company. Earlier in August 2018, the company handed over bonus shares in the ratio of 1:10 to its eligible shareholders. Prior to that, it delivered bonus issue in the ratio of 2:5 in 2010. It had announced its first bonus issue in the ratio of 1:1 in 2002.
While the issue of bonus shares increases the total number of shares issued and owned, it does not change the market capitalization of the company. This increases the overall liquidity of the stock, and makes it more affordable for other investors to add to their portfolio, creating strong upside potential for the stock.
Bonus issue essentially are free shares offered by a company from its reserves. Such issue is perceived to reflect on a firm's strong financials and growth potential.
Karur Vysya Bank Q1 Results:
Along with the bonus issue, Karur Vysya Bank also released its results for the first quarter of the financial year 2026. Its net profit jumped 14 percent on-year to Rs 521.45 crore, while net interest income rose 5 percent on-year to Rs 1,079 crore. Operating profit meanwhile rose 8 percent on-year to Rs 805.50 crore.
Also read: Our LIVE blog on Q1 results
The lender’s asset quality also improved, with net NPA falling more than 42 percent on-year to Rs 170 crore and net NPA ratio reducing to 0.19 percent.
Karur Vysya Bank share price history:
Karur Vysya Bank shares closed marginally lower at Rs 269.85 apiece on July 24. The shares of the lender gained more than 8 percent in the past one month, and over 19 percent in the past six months. The stock has rallied more than 790 percent in the past five years. It currently has a P/E ratio of 11.25.
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