2:1 Bonus Issue: 1 Penny,1 Financial Stock To Turn Ex-Bonus On December 19; Up 250-350% From 1-Year Lows

Two stocks traded on BSE and NSE separately will be in focus on Tuesday, December 19, as they will turn ex-bonus for bonus shares in the ratio of 2:1 each. These are penny stock Kritika Wires on NSE and financial stock Paul Merchant on BSE. Both the stocks have touched new 52-week highs ahead of the bonus issue.

Paul Merchants:

The stock price ended at Rs 3,920 apiece on BSE, with a market cap of Rs 402.98 crore. On December 18th, the stock touched a new 52-week high of Rs 3,984.85 apiece.

From its 52-week low of Rs 1,050, the stock has gained by as much as 280% as of now. YTD, the stock is up by 202%.

Paul Merchants stock will turn ex-bonus on December 19, for its bonus issue in the ratio of 2:1. This means that the company will issue 2 new bonus shares having a face value of Rs 10 each for every 1 existing share having a face value of Rs 10 each.

In the latest development, the company said that the board of directors will meet on December 20th to consider and approve the allotment of bonus shares.

The Company is a Public Limited Company with its scripts listed on the Bombay Stock Exchange. The Company holds licenses issued by the Reserve Bank of India to act as Authorized Dealer Category II and is a prominent Sub-Agent of EBIX Money Express (P) Ltd for providing inbound International Money Transfer services. Further, PML is an IATA-accredited Travel Agency.

2. Kritika Wires:

Kritika is a penny stock below Rs 30 and listed on the NSE. The stock touched a new 52-week high of Rs 29.25 apiece on December 18th. From its 52-week low of Rs 6.60, the stock has skyrocketed over 343% on the exchange. YTD, the stock zoomed by over 133%.

The company fixed December 19 as the record date for the purpose of deciding the members who shall be eligible for allotment of bonus shares in the ratio of 2:1 --- which is two new bonus shares on every 1 existing share.

Kritika is one of the largest wire and galvanizing units of its kind in India. The company's state-of-the-art factory is situated in Sankrail Industrial Park, Howrah, West Bengal and is well-connected logistically.

Bonus shares are issued in a certain proportion only to the existing shareholders free of cost. 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.

Some of the benefits of bonus shares are --- increases number of outstanding equity shares; reduces share price in proportion to number of bonus shares issued; reduces free reserves and surplus of the company; creates implicit value per equity share; increases liquidity in equity shares on the stock exchanges; and reduces per share ratios (for e.g: EPS, Book Value per share, etc.), as per BSE FAQS.

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