Brightcom Group shares, which saw multi-bagger returns over the past year, saw a further 5% increase to Rs. 191 on 17 January 2022 following announcement regarding bonus shares. On Monday, the company stated that its board meeting on 25 January would consider declaring bonus shares issuance for shareholders.
This stock rallied over 475% over the last six months and around 2860% last year. As of 11:00 AM 18 January 2022, it was down 3.25% to Rs. 184.85 on the BSE, with a total trading volume of 21,19,244 and a market cap of Rs. 19,238 crores.
Now let us look into the details of this multi-bagger stock.
Know About the Company – Brightcom Group
It is a digital marketing company providing a variety of advertisement and IT services for leading blue-chip companies. Its clients include names like Facebook, Airtel, Sony, Coca-Cola, ICICI Bank, British Airways, Samsung, Lenovo, LIC, Twitter, Vodafone, Unilever, Maruti Suzuki, ITC, MTV, Viacom, P&G, etc.
The company provides New Media, Ad-tech, and IoT (internet of things) based services for businesses worldwide. It offers customized digital marketing solutions, ERP (enterprise resource planning) solutions, and Microsoft/open source systems development for businesses, online publishers, and agencies. Its main consumer product includes IoT-based LIFE products.
Headquartered in Hyderabad, it has built a global presence, including North America, Western Europe, and Asia Pacific regions. The company has offices in the United States, Israel, China, UK, France, Germany, Sweden, Australia, Italy, Argentina, Mexico, etc. Brightcom Group is ranked in the Fortune India 500 list.
Decision for Bonus Shares as Share Prices Surge
Over the last year, Brightcom Group shares have surged from a price of Rs. 6.48 per share to Rs. 184.85. The multi-bagger stock rallied around 478% in the last six months and around 2720% in the last year. According to this data, an investor investing around Rs. 1 lakh a year ago would have around Rs. 26 lakhs in profits.
As the shares of Brightcom multiplied several times in the past year, small investors may find it difficult to invest in them. The issuance of bonus shares would again bring down the price to affordable levels, encouraging more investments.
Brightcom Group has announced that it intends to reward small investors, who had held its shares for some time. Numbering around 2 lakhs, these investors will be rewarded with bonus shares for their loyalty and patience.
As a result of the share rally, this company has gained an extremely comfortable reserve position of Rs. 3,655 crores on total capital of Rs. 208 crores. According to the company’s statement, this provides it adequate space to capitalize reserves and distribute a part of it as bonus shares issuance.
Recently, Brightcom Group has received approvals from both BSE and NSE for issuance and allotment of equity shares numbering 14,00,50,000 and 1,50,00,000 warrants convertible into equity shares.
Reasons for Price Rally of Brightcom Shares
As of 20 December 2021, Brightcom Group shares have delivered 9000% and 2800% returns in a three and five-year period, respectively. This can be attributed to several factors like strong financial performance, various positive developments, and business expansion.
In the wake of the COVID-19 pandemic, consumer usage of digital media and channels has increased. This, in turn, has improved the outlook of the Ad-tech business and increased the earnings of Brightcom Group.
The company reported strong financial performance in the September 2021 quarter. Its consolidated revenue increased by 73% to Rs. 1103.86 crores in this period from Rs. 639.66 crores in the previous year’s quarter. Its net profits have increased from 103 crores in Q2 FY21 to Rs. 106 crores in Q2 FY22.
Brightcom’s recent acquisition of Vuchi Media, under the brand name ‘MediaMint’, has also boosted its business. In early December 2021, Brightcom Group announced that it acquired the digital marketing firm in a deal worth Rs. 566 crores.
As per the cash-and-stock deal, Mediamint shareholders got Rs. 360 crores in cash and Rs. 170 crores in Brightcom stock. The company would pay the rest Rs. 36 crores within six months of completion of its deal.
In addition to these factors, Brightcom’s preferential allotment to First Global’s vice-chairman Shankar Sharma also contributed to its stock surge. On 16 September 2021, Brightcom issued 1.5 crores warrants convertible into equity shares worth Rs. 37.77 per warrants (with a face value of Rs. 2 each).
Existing shareholders of Brightcom Group will be rewarded with bonus shares. Investors who have constantly held shares as of the cut-off date will be eligible to receive the bonus shares. They don’t have to apply for the bonus shares, as these will be directly credited to investors’ Demat accounts.
Frequently Asked Questions
What is the primary business of Brightcom’s recent acquisition, MediaMint?
MediaMint specializes in advertisement operations, data analytics, campaign management, and creative services. It is an end-to-end digital operations provider and consultant serving renowned clients like New York Times, Netflix, and Pinterest.
How are bonus shares issued by companies?
Companies issue a fixed number of bonus shares in fixed proportions to shares and dividends held by the shareholder. For example, a company may issue bonus shares in a 1:3 ratio, which means the shareholder would receive a bonus share for every three shares he/she holds.
Do you have to pay any charges or fees to get bonus shares?
No, shareholders do not have to pay any additional charges or fees to receive bonus shares. Once a company decides to issue bonus shares, it will directly credit them to Demat accounts (usually between 10-15 days).
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.