Orient Tech shares jump 13% on 1:10 bonus issue announcement: What it means for shareholders

Orient Tech bonus issue

The shares of Orient Technologies jumped more than 13 percent on December 29 after the company announced that its shareholders have considered and approved a bonus issue of shares in the ratio of 1:10.

The shares of the Mumbai-based IT solutions-provider rose to Rs 373.95 apiece in the morning trading hours of Tuesday, the highest level seen by the stock in more than a month.

Orient Tech bonus issue:

Earlier in November, Orient Tech had announced that its board of directors have considered and approved the plan to issue bonus shares in the ratio of 1:10 to its eligible shareholders.

In an exchange filing released on Monday, the company announced that its shareholders too have approved the plan, marking an “important milestone” in its ongoing journey of “sustainable value creation”.

“The approval, received through a Postal Ballot process with strong shareholder participation, reflects continued investor confidence in Orient’s financial discipline, resilient operating model, and its strategic positioning in high-growth technology segments that are driving enterprise transformation across India,” it added.

As part of the corporate action, Orient Tech will implement the bonus issue through the capitalization of Rs 4.16 crore from the Securities Premium Account. The record date to determine the eligibility of the shareholders set to receive the payment is yet to be announced.

What it means for shareholders?

A company announces bonus issue of shares to reward its existing shareholders with an investment opportunity, which is perceived to be attractive. 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.

The issuance of bonus shares will likely increase investors' confidence for the stock, as it reflects on the firm's strong financials and growth potential. Bonus issue essentially are free shares offered by a company from its reserves. Investors must own shares of the company as on the record date to be eligible for the bonus issue.

'Bonus issue reflects balance sheet strength, execution consistency'

The approval of the bonus issue is a clear endorsement of the confidence shareholders have in Orient Technologies’ fundamentals, governance standards, and long-term vision, said the company’s CMD Ajay Sawant. “It reflects the strength of our balance sheet and the consistency of our execution, even as we continue to invest in future ready capabilities across cloud, cybersecurity, and managed services. Our focus remains on building a scalable, resilient, and differentiated technology services platform that delivers sustainable value to all stakeholders over the long term,” he added.

The company said that the bonus issue is not merely a capital action but a reflection of its “balance sheet, consistent performance, and prudent capital management approach”. It noted that it has maintained a disciplined focus on strengthening its financial position while continuing to invest in core growth areas such as cloud services, cybersecurity, managed services, and digital transformation over the years.

Orient Tech share price:

Orient Tech shares have gained nearly 10 percent in the past five days, and around 4 percent in the past one month. The stock jumped around 6 percent in the past six months, but is down around 24 percent in 2025 so far.

Its P/E ratio currently stands at around 27.

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