IEX has set a new record date for its bonus issue

An Overview

The Indian Energy Exchange (IEX) informed stock exchanges this week that the firm has marked the 6th of December as the record date for accessing whether shareholders are liable for bonus equity share issuance. The company’s top management has proposed a bonus issuance of equity shares in a 2:1 ratio, adhering to stockholder consent through postal ballot.

The suggestion indicates that for every one share of the corporation that a person owns, he or she will receive two extra shares. Bonus shares will be issued from free reserves created from the company’s profits at the end of FY21, according to the corporation.

Further Key Takeaways

The bonus issuance follows a 72 percent increase in the company’s stock in the September quarter, surpassing the S&P BSE Power Index by 16 percent. Bonus shares are typically issued to shareholders in order to boost the liquidity of the stock as well as to lower the stock price to make it more accessible to investors. Bonus shares are fully paid additional shares issued to current shareholders by a corporation.

IEX recorded a 69 percent increase in standalone net profit for the September quarter, up to Rs 78 crore from Rs 46 crore the previous quarter. On the NSE, IEX was down 0.71 percent at 806.95 on Tuesday. The stock has increased by 267 percent since the beginning of 2021. The revenue from activities of IEX increased by 56 percent to Rs 109 crore in the reporting quarter from Rs 70.7 crore the previous year

IEX is India’s largest energy exchange, offering a countrywide automated trading network for the physical delivery of power, renewable energy, and certificates. In an effort to develop an integrated South Asian Power Market, IEX has lately pioneered cross-border energy trade, expanding its power market outside India.

IEX is looking for shareholder approval to issue bonus shares

Through a postal ballot notice, the Indian Energy Exchange (IEX) would seek shareholder approval to issue bonus shares. According to a Bombay Stock Exchange filing, the firm has sent out a postal ballot notification to shareholders seeking approval on a plan to issue bonus shares.

On October 21, 2021, the board approved and suggested issuing bonus equity shares of rupee one each, attributed as fully paid-up, to qualified members of the company in the percentage of two new fully paid-up equity shares of rupee one each for every one established fully paid-up equity share of rupee one each retained by them, by capitalising a total not surpassing Rs 59 crore out of the firm’s capital redemption reserve and general reserves as of 31st March, 2021.

The outcomes of the postal ballot/e-voting will be declared at the corporate office no later than two working days after the e-voting closes, on or before Monday, November 29, 2021, and will be showcased at the corporate office and informed/communicated to BSE Ltd and National Stock Exchange of India Ltd, where the company’s equity shares are listed.

The firm will also seek approval from its members for an increase in authorised share capital and, as a result, a change in the capital clause of the memorandum of association. The current authorised share capital is Rs 40 crore.

Frequently Asked Questions (FAQs)

Q1. What is a bonus issue and how does it work?

A bonus issue is a stock dividend distributed by a corporation to its shareholders as a way of rewarding them. The bonus shares are issued from the company’s reserves. If the ratio is 2:1, existing shareholders will receive two additional shares for everyone they already own at no cost.

Q2. What’s the point of the bonus issue?

A bonus issue is an offer made to the company’s current shareholders to purchase extra shares. Rather than increasing dividends, firms offer to distribute new shares to shareholders. For instance, the corporation could opt to provide one bonus share for every ten shares held.

Q3. What are the benefits of issuing bonus stock?

Bonus shares send a favourable message to the market, indicating that the company is committed to a long-term growth strategy. Bonus shares increase the number of outstanding shares, which improves the stock’s liquidity. As the issued share capital grows, so does the perception of the company’s size.