2:1 Bonus Issue: Multibagger Defence Stock Up 400% YTD; Turns Rs 50,000 Into Rs 2.5 Lakh In 11 Months

BSE-listed defence stock, Avantel Ltd has recorded remarkable gains so far in 2023. On November 24th, when Avantel shares turned ex-bonus in the ratio of 2:1, they rallied to hit a new 52-week high and were even locked at 10% upper circuit. Riding on the back of bulls, Avantel shares have given more than 400% returns to investors year-to-date. In fact, in 11 months, the stock turned Rs 50,000 to more than Rs 2.5 lakh corpus, far greater returns than any traditional investment schemes.

On Saturday, in an exchange filing, Avantel said that the company has allotted 16,21,79,720 equity shares of Rs.2/- each, by way of Bonus Issue, to such members whose names appeared in the Register of Members as of November 24, 2023, being the Record Date fixed for the said purpose.

Avantel turned ex-bonus on November 24th for bonus issue in the ratio of 2:1, which means that the company will issue two new fully paid-up equity shares at face value of Rs 2 each against every 1 existing sharech.

On the ex-bonus day, Avantel shares froze at 10% upper circuit at Rs 128.60 apiece. This is also Avantel's new 52-week high. Upper circuits mean there were several buyers but no sellers on this day.

Last year, Avantel alloted bonus shares in the ratio of 3:1.

Avantel has been supporting the strategic sector for three decades and has rolled out many unique products/solutions to Indian Defence Services and allied establishments. The company in its initial years, has manufactured various building blocks of the Radios.

From early 2000 onwards; the company has reoriented itself and started offering system-based solutions to its customers in four main verticals i.e. Satellite Communications, HF Communications, Electronic Warfare and Radar systems respectively. Presently, the company is in the process of enhancing its portfolio and developing SCA-compliant Software Defined Radios, High Power HF systems, Air Defence Radars and Small Satellites.

In the trading week that ended on November 24th, Avantel shares gained by at least 10.4% on BSE. Its monthly upside is 26.2% and half-yearly gains are by a massive 293%. From January 2023 to date, the stock has zoomed by a breathtaking 403.13% on BSE. The stock below Rs 26 levels at the start of the current year.

Let's say an investor had invested Rs 50,000 in Avantel shares on January 2, 2023, when the share price was at Rs 25.56 apiece, their investment would have risen to over Rs 2.51 lakh corpus by now.

It also needs to be noted that Avantel shares have turned ex

It also needs to be noted that Avantel shares have turned ex-split in mid-August this year in the ratio of 1:5. This means that each existing share having a face value of Rs 10 each were sub-divided into five shares having a face value of Rs 2 each.

Apart from this, Avantel has also been a dividend-paying smallcap stock. As per Trendlyne data, since June 2001, Avantel has delivered up to 20 dividends. In the last 12 months, the stock declared a Re 1 dividend per share.

Adjusting to its bonus, splits and dividends, the stock's dividend yield is at 0.05% on the current market price.

Trendlyne data also showed that Avantel's weekly average delivery volume is 75.64%, while the stock is trading above 8 out of 8 SMAs. Further, it is trading above 7 out of 9 Oscillators in a bullish zone. Additionally, the stock is trading above its pivot of Rs 125.07. The stock's RSI is overbought at 78.8, but MFI is in mid-range at 56.3. Lastly, the stock's beta 1-year is at -0.3% which is very low volatility.

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