Bonus Ratio of 1:1: Greenlam Industries Issues Free Shares on 10th Listing Anniversary

Greenlam Industries Ltd has taken significant corporate action by announcing a bonus issue in the ratio of 1:1. This means that for every 1 share held, shareholders will receive 1 additional free share at no extra cost.

As per the company’s exchange filing, the record date for the bonus issue is yet to be determined. This is the 1st ever bonus issue in the company’s history, despite its past corporate actions, including dividend payouts and a stock split from ₹5 to ₹1.

Share price of Greenlam Industries trading at ₹555 at 3:17 PM as of January 31, 2025. 

Why Do Companies Issue Bonus Shares?

Bonus shares are issued primarily to capitalise free reserves and increase a company’s paid-up capital. This move also has implications for the company’s Earnings Per Share (EPS) and helps in reducing accumulated reserves. Since these shares are distributed at no additional cost to shareholders, they are often referred to as free shares.

Greenlam Industries’ Q3FY25 Financial Performance

Alongside the bonus announcement, the company also released its financial results for the Q3 quarter ended December 31, 2024.

• Revenue from operations: Grew 6.9% YoY to ₹602 crore, compared to ₹563 crore in Q3FY24.
• Segment-wise performance:
  • Laminates: Value growth of 4% and volume growth of 2.6% YoY.
  • Engineered Flooring: Grew by 13.8%.
  • Engineered Doors: Reported a massive 49.5% growth.
  • Plywood: Surged by 90.7%.
• Gross margins: Increased 20 basis points, reaching 55.0% compared to 54.8% in Q3FY24.
• Net profit: Declined to ₹12.5 crore from ₹25 crore in the previous year’s corresponding quarter.

Increase in Authorised Share Capital

In another development, Greenlam Industries has approved an increase in its authorised share capital. The company’s authorised capital will rise from ₹19 crore (19 crore equity shares of ₹1 each) to ₹30 crore (30 crore equity shares of ₹1 each).

What’s Next for Shareholders?

With the bonus issue marking a significant milestone in the company’s journey, investors are now awaiting the announcement of the record date. The move not only rewards existing shareholders but also enhances liquidity in the stock market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.