1:1 Bonus Issue, 25% Dividend Ahead: Not IRFC, Or RVNL, But This Top PSU Railway Stock To Offer Double Rewards

RITES Ltd, one of the leading PSU railway companies with Navratna status, has announced double rewards for its investors. The investors will not only get a 25% dividend payment but also a 1:1 bonus issue. The announcement was made in a board meeting held on July 31, alongside Q1 results for FY25. However, the share price of RITES ended on a bearish tone due to a decline in earnings.

RITES Bonus Issue:

The company has announced a bonus issue in the ratio of 1:1. Meaning, RITES will issue 1 (One) bonus equity share of Rs.10/- each fully paid-up for every 1 (One) existing equity share of Rs.10/- each fully paid- up, to the eligible members by capitalizing a a sum not exceeding Rs. 240,30,18,870.00 out of the sum standing to the credit of 'Capital Redemption Reserve and Free Reserves.

As per the regulatory filing, the balance in Capital Redemption Reserve and Free Reserves to be utilized for implementing the bonus issue is Rs. 240.30 Crore.

Example: If an investor holds 1,000 equity shares of RITES currently, then after the record date for the 1:1 bonus ratio, they will receive another 1,000 bonus shares, taking their total number of shareholding to 2,000 shares. Also, the share price will be adjusted accordingly.

RITES has yet to declare the record date, ex-bonus date, allotment details, and distribution date for the bonus issue. However, it has mentioned that it plans to complete this corporate action within two months from the date of approval of the Board, as statutorily required.

RITES Dividend:

The civil construction company has further declared the first interim dividend of Rs 2.50 per share (25% of paid-up share capital) of the company for FY25. The record date to determine eligible shareholders is set on August 8.

Earlier, in January 2024, the stock turned ex-dividend for a payout of 47.5% worth Rs 4.75 per share. In FY24, the company delivered dividends of 180% worth Rs 18 per share.

Currently, the dividend yield is at 2.52%.

RITES Q1 Results:

In the June 2024 quarter, RITES reported a consolidated net profit of Rs 90.44 crore, registering a decline of 24.4% YoY and 33.82% QoQ. The company's net profit was at Rs 119.58 crore in Q1FY24 and Rs 136.67 crore in Q4FY24.

Further, in terms of the top-line front, RITES revenue stood at Rs 485.76 crore in Q1FY25, also decreasing from Rs 544.35 crore in Q1FY24 and Rs 643.25 crore in Q4FY24.

About RITES:

RITES Limited is a Navratna Public Sector Enterprise and a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach. The company has an experience spanning 50 years and has undertaken projects in over 55 countries in Asia, Africa, Latin America, South America, and the Middle East region.