1:2 Bonus Issue Allotment: Maharatna Oil PSU Stock HPCL Drops On Ex-Bonus Date: Rs 16.50/Sh Dividend Is Next

Maharatna PSU oil and gas giant, Hindustan Petroleum Corporation (HPCL) share price fell sharply on the day it turned ex-bonus for its upcoming bonus shares allotment in the ratio of 1:2. The company fixed June 21 as the record date to determine eligible shareholders for bonus issue. HPCL's share price is anticipated to fluctuate within a trading range of Rs 500 to Rs 575.

After market hours of the June 21 session, HPCL share price ended at Rs 342.15 apiece, down by 2.03% on BSE with a market cap of Rs 72,803.45 crore. The stock price is adjusted to its bonus shares ratio. The stock's 52-week high and low is at Rs 396.66 apiece and Rs 159.58 apiece respectively.

Currently, HPCL has a low PE ratio of 5.06x and a healthy return on equity of 35.01%. YTD, the stock is up by 28% on BSE.

HPCL Bonus Issue:

The Oil Marketing Company announced bonus shares in the ratio of 1:2, meaning, 1 free share on every 2 existing shares. The record date was June 21, 2024. The bonus shares are carried from the company's free reserves of Rs 38,006.98 Crore as of March 31, 2024.

The required free reserves for bonus issue is Rs709.27 Crore.

Just ahead of the bonus issue, HPCL clarified related distribution and allotment among other key factors for the bonus issue.

In its regulatory filing on June 20, HPCL said, the Board has recommended the declaration of 1 (one) bonus share for every 2 (two) shares held. Consequent to this fractional entitlements may occur on shares held by shareholders in odd numbers (only to the extent of the odd number which in all cases may be one share and the fractional bonus entitlement is 0.5 shares) due to the inability of the Company to allot shares in fractions. The fractional entitlements of the shares will be credited to a dedicated Demat account opened for this purpose and the same will be managed as below:-

- Allotment to Dedicated Demat Account: The Company will allot the entire fractional share entitlement to a dedicated Demat account opened specifically for the credit of fractions arising from the bonus share allotment.

- Approval and Sale Process: Upon obtaining approval to trade the Bonus shares from the Exchanges, the Company will proceed to sell the fractional bonus shares.

- Distribution of Proceeds: After deducting the related expenses, the proceeds from the sale of fractional bonus shares will be credited to eligible shareholders entitled to receive such proceeds.

In the past also the Company has extended a similar treatment to fractional entitlements arising from the issuance of Bonus shares to all eligible shareholders, it said.

The eligible shareholders are those who have HPCL shares in their demat accounts as of June 21, 2024.

HPCL Share Price Technical Analysis:

Ahead of the bonus issue record date, on HPCL share price valuation, Jigar S. Patel, Research Analyst at Anand Rathi told GoodReturns.In that "Hindpetro's stock is currently exhibiting a support level at Rs 510 and a resistance level at Rs 544. The support level of Rs 510 acts as a price floor, where buying interest is strong enough to prevent the stock from declining further, while the resistance level at Rs 544 serves as a price ceiling, where selling pressure tends to prevent the stock from rising higher."

Patel added, "A significant close above the Rs 544 resistance level could signal a bullish breakout, potentially driving the stock price up to Rs 575, which is identified as the next resistance or target level. In the short-term, Hindpetro's stock is anticipated to fluctuate within a trading range of Rs 500 to Rs 575, indicating that prices are likely to oscillate between these levels."

HPCL Dividend:

After the bonus issue, the next big reward by HPCL is its dividend payout. HPCL has announced Rs 16.50 per share final dividend having a face value of Rs 10 each for FY24. The record date is fixed on August 9, 2024.

The same would be paid within 30 days from the date of declaration at the ensuing AGM. The final equity dividend is in addition to the Interim Dividend(s) of Rs. 15.00 per share (pre-bonus) paid for the financial year 2023-24.

HPCL is one of the largest integrated Public Sector Undertaking, engaged in the business of refining Crude Oil and marketing of various petroleum products like Asphalt, Diesel, Kerosene, LPG, Lube Oils, Petrol, branded products like ATF (Aviation Turbine Fuel), Power, Turbojet, Naphtha, throughout India and at select foreign countries. Some of these products are exported to other countries.

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