NBCC Goes Ex-Bonus, Shares Plunge; Edelweiss Says Hold

Shares of state-run construction company NBCC, which was formerly known as National Buildings Construction Corporation, plunged as much as 10.26 per cent to hit intraday low of Rs 155.70 after the shares of the company traded ex-bonus on stock exchanges today. NBCC had on January 4, 2017, said that its board was considering issuing one bonus share of face value of Rs 2 for every two shares of face value of Rs 2 held by its shareholders. After issuing bonus shares, NBCC's shares in the market will increase to 90 crore as per the company's statement.

NBCC has fixed February 21, 2017 as the record date for the purpose of issue of ascertaining the eligibility of shareholders for issuance of bonus shares.

Edelweiss has a hold recommendation on NBCC shares. "Robust revenue visibility, cash-rich balance sheet and healthy return ratios are key positives for NBCC. However, execution is expected to improve only with a lag due to slowdown in real estate segment and also as most the redevelopment projects won the last year are currently in preparatory phase. Pick up in pace of work in these projects will determine stock performance, in our view," the brokerage said in a note. 

As of 11:21 am, shares of NBCC traded 9.25 per cent lower at Rs 175, underperforming the Nifty which was up 0.77 per cent.