Bharat Rasayan shares jump 15% on stock split, bonus; corporate actions explained

Shares of Bharat Rasayan Ltd climbed 15 per cent in Friday’s trade following corporate actions. On an adjusted basis, the stock rose 14.86 per cent to a high of Rs 2,844, as it turned ex-date for a 1:1 bonus issue and a stock split that reduced the face value from Rs 10 to Rs 5. The adjusted price for Thursday, following today's corporate actions, stands at Rs 2,476. Some trading apps might be showing the unadjusted stock price of Rs 9,895 apiece for Thursday and, hence, showing 72 per cent drop for the stock today. But investors need not worry. 

Effectively, the stock split led price adjustment wherein, the conversion reduced the per share face value but expanded the share count. The corporate action may improve liquidity on the counter, widen shareholder base and make shares affordable to small investors. 

Besides, the stock also turned ex-bonus in the 1:1 ratio. It means existing investors would get one free share on every one share they held. It would be given out of free reserves and capital redemption reserve of the company, and, hence, stock price adjusted accordingly on the ex-date. Today is also the record date for the same. 

The deemed date of allotment of bonus shares is Monday, December 15, with requisite documents for credit of bonus shares in the depository system likely to be submitted to the depositories latest by 12 PM. The bonus shares would be available for trading on the next working date of the allotment i.e. by Tuesday, December 16.  

The sub-division of shares meant 41,55,268 existing shares of Bharat Rasayan with face value Rs 10 each got split into 83,10,536 shares of face value Rs 5 each. Bharat Rasayan would now issue 83,10,536 fresh shares of face value Rs 5 each as bonus.   

Bharat Rasayan Ltd is engaged in manufacturing technical-grade pesticides, pesticide formulations and intermediates. The company manufactures technical-grade products such as fenevalrate technical, D ethyl ester technical and isoproturon technical. All equipment used in manufacturing, testing and packaging is regularly maintained and calibrated, both in-house and by third-party laboratories.