Shares of RITES zoomed more than 11 percent in the early trade on July 29 after the railway-linked state-run company informed the exchanges that it will hold a board meet on July 31 to consider a bonus issue of shares.
Along with the bonus issue proposal, the board will also consider its June quarter earnings and a first interim dividend for FY25.
In the past, RITES had declared a 1:4 bonus issue in 2019. Shareholders received one free share for every four they held as of the record date.
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Bonus issues are usually issued out of a company's reserves or retained earnings and are often used to reward shareholders, adjust the share price, or increase liquidity in the stock.
Unlike dividends, which provide cash to shareholders, bonus issues increase the number of shares held but do not affect the total value of the investment. Only those investors will be eligible for bonus shares who will buy the stock before the ex-date.
RITES is a multidisciplinary engineering and consultancy organization uniquely placed in terms of diversification of services and geographical reach in various sectors such as railways, highways, urban engineering (metros) & sustainability, airports, ports, ropeways, institutional buildings, inland waterways, and renewable energy.
At 10:21 am, RITES shares were trading 11.5 percent higher at Rs 743 on the National Stock Exchange (NSE). Shares of the PSU have remained volatile in the last six months, gaining around 3.5 percent.
In the last one year, the stock has surged 61 percent, outperforming Nifty's rise of 26 percent during this period.
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