Textile products maker, Axita Cotton surged by nearly 16% in a single day due to turning ex-date for bonus issue in the ratio of 1:3. The stock is currently below Rs 18, and will buzz ahead due to allotment of its rewards.
Axita Cotton Share Price:
After market hours of September 20, the textile stock stood ended at Rs 17.32 apiece, up by 6.72% on BSE with a market cap of Rs 602.45 crore. Overall, in the day, the stock zoomed by over 15.5%.
Adjusting to the bonus issue ratio, Axita Cotton corrected sharply. However, the share capital reserve is the same.
YTD, the stock dropped by 14% on BSE.
Axita Cotton Bonus Issue:
The textile player fixed September 20 as the record date to determine eligible shareholders for the issue and allotment of Bonus Equity Shares.
The ratio of 1:3 means that Axita will allot 1 new equity share for every 3 existing shares.
Bonus shares are one of the many corporate actions that listed companies announce on several occasions. Bonus shares are like incentives which are free of cost given to investors. Under this corporate action, new shares are issued at the existing Face Value of equity shares of the company. Hence, the face value remains the same post-bonus issue.
Axita Cotton Fundamentals & Technicals:
As per Trendlyne data, the fundamentals of Axita Cotton stock analysis are:
- Stock Price rose 12.39% and underperformed its sector by 43.96% in the past year.
- Debt to Equity Ratio of 0.31 is less than 1 and healthy. This implies that its assets are financed mainly through equity.
- Mutual Fund Holding remained the same in the last quarter at 0%.
- Interest Coverage Ratio is 36.56, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).
- Price to Earning Ratio is 33.22, lower than its sector PE ratio of 71.11.
- Return on Equity(ROE) for the last financial year was 31.49%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.
- Promoter Share Holding stayed the same in the most recent quarter at 62.77%.
- Promoter Pledges are zero.
Meanwhile, the technical of Axita Cotton is broadly stable. The key moving averages MFI and RSI are at 51.8 and 36.1. This is because MFI and RSI indicators below 30 will indicate that the stock is oversold, while if the parameter is above 70, it would mean a stock is oversold.
The stock is trading above 5 out of 8 SMAs, while it is above 5 out of 9 Oscillators in the bullish zone.
About Axita Cotton:
It was formed to start a business of production and trading of Seed cotton ("Kapas"), Cotton Seed, Cotton Seed Oil, Cotton cake etc and for which land admeasuring area of 5708 Square Meters was acquired at Chattral, Kadi Road, Mehsana.
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