Consumer Discretionary Stock Okays Stock Split & 6:11 Bonus Shares: Are You Eligible?

With a market valuation of Rs 451.64 Cr, Lorenzini Apparels Ltd is a small-cap company in the consumer discretionary industry. The company Lorenzini Apparels Limited is involved in the production, design, and sale of ready-made clothing. The BSE started today's trading session for Lorenzini Apparels Ltd's shares at Rs 441.70 per share, but they quickly rose to an intraday high of Rs 453.80 per share during the morning sessions, recording a gain of 4.70%. Following the company's announcement of bonus shares and a stock split, the stock was trading with an upside gap of 3.93% at Rs 450.50 apiece at the time the article was written.

The Board of Directors of the Company at their meeting held on Monday, February 12, 2024 inter-alia, considered and approved "Sub-Division of Face Value of Equity Shares of the Company from Rs. 10/- (Rupees Ten Only) each to Re. 1/- (Rupee One) each, subject to the approval of shareholders to be obtained through Postal Ballot process. In this regard, the record date for such division/ split shall be intimated to the stock exchanges in due course."

The Board also approved the "Proposal of issuance of Bonus equity shares to the security holders of the Company in the ratio of 6:11 i.e. 6 (Six) new fully paid-up equity share of Re. 1/- (Rupee one only) each for every 11 (Eleven) fully paid-up Equity Shares of Re. 1/- (Rupee one only) held by the Eligible securityholders of the Company as on the record date, subject to the approval of shareholders to be obtained through Postal Ballot process. In this regard, the record date for such bonus issue shall be intimated to the stock exchanges in due course," said Lorenzini Apparels in a stock exchange filing.

The company said the sub-division of every 1 equity share of the nominal/face value of Rs. 10/- each into 10 equity shares of the nominal/face value of Rs. 1/- each has been approved in order to improve the liquidity of company's share and to make it more affordable for small investors and also to a broad base of small investors.

"Further, consequent to sub-division/split in face value of Equity Shares from Rs. 10/- each to Re 1/-, resulting into 10 Equity Shares of Re 1/- each for existing 1 Equity Share of Rs. 10/- each, conversion ratio for outstanding warrant stand changed to 1 (one) Warrant is convertible, at the option of the warrant-holder by paying the remaining 75% consideration within the time limit prescribed under the provisions of the SEBI (ICDR) Regulations, 2018, into 10 (Ten) Equity Shares of Re 1/- (Rupee One Only)," said Lorenzini Apparels in a regulatory filing.

60,967,020 equity shares of face value of Rs.1/- each (post considering the split of shares) which includes the amount of Rs. 56,63,842 specifically reserved for 10,38,371 outstanding warrants convertible into equity shares is the total number of securities proposed to be issued or the total amount for which the securities will be issued (approximately) as a part of bonus shares.

Subject to obtaining shareholders' approval shares would be credited/dispatched and other approvals, the bonus shares will be credited /dispatched within 2 months from the date of Board approval, said Lorenzini Apparels.