Bonus Issue: A Maruti Suzuki-backed joint venture is coming up with a bonus shares reward in the ratio of 1:1. This JV is none other than Bharat Seats whose stock price has been flying high throughout 2024 so far. Ahead of the Bharat Seats bonus issue, investors also have the opportunity to reap gains in its parent, Maruti Suzuki. Brokerage Motilal Oswal is the latest to recommend BUY in Maruti stock for the target price of Rs 13,875 apiece.
Maruti Suzuki Share Price:
Maruti Suzuki's share price currently is at Rs 11307.25 apiece with a market cap of Rs 3,55,502.85 crore. The stock ended the trading week of November 4-8 with gains of nearly 3%. YTD, the stock is up by nearly 10% on BSE.
Motilal Oswal On Maruti Suzuki:
Motilal recommended BUY on Maruti after its parent Suzuki Motor unveiled its first electric SUV, e-Vitara, in Milan, Italy. It cited that mass production of this model will commence at Suzuki Motor Gujarat in India in spring 2025, with sales expected to begin in around summer 2025 in various countries, including Europe, India, and Japan.
Explaining in detail the key highlights of the new electric vehicle, Motilal added that the e-Vitara is based on a newly developed "HEARTECT-e" platform specifically for BEVs. The platform is jointly developed by Suzuki, Toyota and Daihatsu Motor, leveraging each company's technological capabilities. This vehicle will be supplied by Suzuki to Toyota in various markets.
Notably, the e-Vitara would be competing with Tata Curvv EV and MG ZS EV. It is also expected to rival Hyundai's Creta EV and M&M's BE 05.
That being said, on the valuation, Motilal said, "The e-Vitara is a global product to be manufactured at SMG Gujarat and exported to Japan, Europe, etc. As per some news articles, 50% of its production would be earmarked for export markets, with production in the first year expected to be 140k units. Thus, it will evolve as a good volume driver for MSIL with huge export potential and a gradual ramp-up expected in the domestic market. Reiterate BUY on MSIL with a revised TP of INR13,875 (premised on 26x Sep'26E EPS)."
Bharat Seats Bonus Issue:
This company with penny stock status has received approval from the board for the issuance of 1 (one) Bonus Share for every 1 (one) Equity Share held by the Equity Shareholders of the Company as of 'Record Date'. This Bonus Issue of Equity Shares is subject to the approval of the shareholders and other applicable statutory and regulatory approvals as may be required.
The company will issue up to 3,14,00,000 Equity Shares at a face value of Rs. 2/- each. These bonus shares will be issued out of free reserves of the Company available as of 31st March 2024 based on the Audited Financial Statement as of 31st March 2024. Up to Rs 6,28,00,000/- is required for implementing the Bonus Issue.
The company plans to complete its bonus issue action within 2 months from the date of the Board's approval i.e. by January 4, 2025.
According to Bharat Seats, the Bonus Shares if allotted shall rank pari-passu in all respects and carry the same rights of the existing Equity Shares and shall be entitled to participate in full in any dividend and corporate action(s), recommended and declared after the issue and allotment of such Bonus Shares.
Currently, Bharat Seats is at Rs 214.30 per share with a market cap of Rs 672.90 crore.
Bharat Seats Ltd is a joint Venture of Suzuki Motor Corporation Japan, Maruti Suzuki India Ltd, Rohit Relan and Associates with the aim to manufacture complete seating systems and auto components.
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