REC Ltd Shares Trade Higher Riding On Bonus Issue Announcement
Shares of REC Ltd opened with an upwards trend on Wednesday as the stock started trading ex-bonus ahead of its bonus issue slated for tomorrow. From Tuesday's closing at Rs 102.94 a piece, the stocks touched a high of Rs 106. At 2:58 PM, the shares traded at Rs 105.60 recording 2.38 per cent growth today.
Government-owned REC Limited, an infrastructure finance company in the power sector, is set to go for a bonus shares issue in the ratio of 1:3 on August 18, 2022. Bonus shares are additional, fully paid shares that the firm issues to its existing stockholders
The company has received approval of shareholders for the bonus issue through a postal ballot held between July 11 and August 9. The result was announced on August 9. The company will be issuing 65.83 crore bonus shares, utilising capital reserves of ₹658.3 crores. The bonus issue ratio for REC is 1:3 which means shareholders will be paid one bonus shared for their existing three equity holdings
“The Board of Directors has recommended the issue of Bonus shares to the shareholders of the Company in the ratio of 1:3, i.e. one (1) bonus equity share of ₹10- each fully paid-up for every three (3) existing equity shares of ₹10- each fully paid- up to the eligible members, subject to the approval of shareholders through postal ballot," REC said in a regulatory filing.
The bonus shares will be issued to shareholders who owned the company's stock on or before the ex-bonus date which in REC's case is August 17.
A Navratna company, REC Ltd, formerly known as the Rural Electrification Corporation Limited, comes under the administrative control of the Ministry of Power.
