The Indian equity market is undergoing weakness amid sustained selling by foreign investors, global geopolitical tensions, unfavourable domestic macroeconomic cues, and cautiousness due to the ongoing corporate earnings for the fourth quarter of fiscal 2022.
Market participants keenly remain watchful of the corporate actions in the market for further investment decisions. These corporate actions include dividend, bonus share issues, financial results, stock splits, share buybacks, and rights issues, among others.
A corporate action is an event by a public company that has the potential to impact its share price. Such actions are approved by a board of directors of the company and authorized by the shareholders.
Going ahead in May, here are key corporate actions that investors need to watch out for:
BLS International Services – Bonus Issue
The board of BLS International Services has announced a bonus issue of equity shares in the proportion of 1:1. This means a shareholder will get one share for every single share held on the record date. The company has set the record date of May 17, 2022, and the stock will go ex-bonus on May 13.
The Board of Directors of BLS International Services would meet on May 07, 2022, to declare the financial results of the company for the quarter and year ended March 31, 2022, and will also recommend a final dividend, if any, for the fiscal year 2021-22.
BLS International Services is an online visa application centre and provides visa consultancy services. The company’s stock price has jumped more than 93% YTD, while it has rallied over 300% in the last one year.
Vikram Thermo (India)- Bonus Issue
Pharmaceutical company Vikram Thermo (India) has announced a bonus issue of equity shares in the proportion of 4:1. The company has set May 13, 2022, as the record date for the bonus issue. The stock shall turn ex-bonus on May 12.
On April 1, 2022, the board of Vikram Thermo (India), at its meeting, approved the issue of bonus equity shares in the ratio of 4 bonus shares for every one equity share held by the shareholders.
The stock price of Vikram Thermo (India) has risen over 74% YTD, while it has gained over 58% in one year. The stock price has jumped nearly 300% in last three years.
Black Box – Share Split
The board of directors of Black Box Ltd approved the splitting of its equity shares on April 26, 2022. As per the regulatory filing, Black Box Ltd has fixed May 17, 2022, as the record date for the purpose of determining the eligibility of shareholders for the purpose of sub‐division /split of each equity share having face value of Rs 10 each, fully paid‐up into five equity shares having face value of Rs 2 each fully paid‐up.
Black Box is a provider of advanced technological solutions and consulting services. The stock price has eased over 3% YTD, while it has fallen more than 50% in one year. However, if we look at the three-year chart, Black box shares have jumped over 637%.
IndiaMART InterMESH – Share buyback
The company’s board approved the buyback of up to 1,60,000 fully paid up equity shares of the company at Rs 6,250 per share, for an aggregate amount not exceeding Rs 100 crore.
The buyback offer size represents 5.32% and 5.37% of the aggregate of the company’s fully paid-up capital and free reserves as per the latest standalone and consolidated audited financial statements of the Company, respectively, as on March 31, 2022, which is less than 10% of the total paid-up equity share capital and free reserves of the company, as per the company’s exchange filing.
The record date for the buyback has been fixed as May 11 and the stock turns ex-buyback on May 10.
Sinclairs Hotels – Share Buyback
Sinclairs Hotels Ltd’ board has approved the buyback of up to 7 lakh equity shares at a price of Rs 143 per equity share payable in cash. As per the company’s exchange filing, the Buyback will be on a proportionate basis through the Tender Offer process. The record date for the buyback has been fixed as May 13, 2022.
The company’s total pay-out towards buyback would be Rs 10.01 crore and the buyback represents 2.51% of the total number of equity shares and 9.93% of the paid-up share capital and free reserves of the company for the FY21. The record date for the buyback has been fixed as May 13 and the stock turns ex-buyback on May 12.
What is Corporate Action?
A corporate action is an event held by a public company that materially impacts its stakeholders and the prices of its securities – equity or debt. Corporate actions are approved by the company’s board of directors and authorized by the shareholders.
What are examples of Corporate Actions?
Some corporate actions include the payment of dividends, right issues, mergers and acquisitions, stock splits, bonus issues, etc.
What is Bonus share Issue?
Bonus Share Issue is an offer of free additional shares distributed by a company to its current shareholders as fully paid shares. Bonus shares are issued to capitalise a part of the company’s retained earnings for conversion of its share premium account, or distribution of treasury shares.
What is Stock Split?
A stock split is an event when a company increases the number of its shares issued. In a stock split, even as the number of shares outstanding rises by a specific multiple, the total value of all shares outstanding remains the same.
What is a dividend?
A dividend is a distribution of a part of the profits earned by the company to its shareholders. The board of directors of the company determine the dividend payments and the amounts. Dividends are generally a reward to the shareholders for putting their money into the company.