Shares of KBC Global Limited, a penny stock trading below ₹5, saw a rise of 2% on Monday, February 17, 2025, following the company's announcement of a bonus share issue. The board of directors approved the issuance of bonus shares in a 1:1 ratio, meaning that shareholders will receive one additional equity share for every share they currently hold.
Investors may be interested in how such moves can impact their portfolios and the broader market trends. This may prompt those who wish to invest in stocks to stay alert for similar opportunities.
Bonus share issue approval
On February 15, 2025, KBC Global's board confirmed the approval for a fully paid-up bonus issue in the ratio of 1:1. This decision will result in one bonus share being issued for every existing share held by shareholders. As per the company's statement, the bonus shares will be distributed from the permissible reserves, including free reserves, securities premium account, and capital redemption reserve, as of March 31, 2024. The total sum allocated for the bonus issue amounts to ₹261.43 crore.
In a statement, the company also mentioned that the record date, which will determine the shareholders entitled to receive the bonus shares, will be communicated in due course. Such announcements typically generate positive investor sentiment, which can lead to increases in stock prices, as seen with KBC Global's shares on the day of the announcement.
Company's financial outlook and impact
The bonus share issue will increase KBC Global's share capital from ₹261.43 crore to ₹522.87 crore. The capital consists of an equal number of ₹1 equity shares, which will see an increase in value following the issuance of bonus shares. Investors will be keen to monitor the development of the company's financial position and how this bonus issue impacts its market performance in the long run.
The stock's price on the day of the announcement rose by 1.8%, opening at ₹1.13 per share, its highest point of the day. During the session, it touched a low of ₹1.11 per share, still indicating positive movement after the bonus share news. While this increase signals optimism for shareholders, it is essential to note that the stock has experienced a decline of nearly 50% in the last year and has already lost 36% of its value in 2025. Investors who wish to invest in stocks will need to consider the volatility and historical performance before making decisions.
Other significant company changes
In addition to the bonus share issue, KBC Global's board of directors also approved a change of name for the company. The firm will now operate under the new name, Dharan Infra-EPC Limited, or any other name approved by the Registrar of Companies (ROC). The previously suggested name was rejected due to availability issues. Additionally, Naresh Karda has been appointed as Chairperson of KBC Infrastructure Limited, the company's wholly-owned subsidiary in the UK.
What does this mean for investors?
As of 12 PM on February 17, 2025, KBC Global's stock price stands at ₹1.12, and the bonus share issue further adds an element of attractiveness for shareholders, particularly those seeking value in the penny stock segment. This move could make the stock appealing to investors looking for opportunities to diversify their portfolios.
However, as KBC Global continues its growth journey, prospective investors must carefully assess the company's broader performance trends and consult with analysts for informed decision-making. Whether you're a newcomer to the market or an experienced trader, it's vital to weigh the potential rewards and risks when considering whether to invest in stocks like KBC Global.
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