Gujarat Toolroom, a penny stock engaged in the business of gems, jewellery and other industrial products, has hit back-to-back five upper circuits including that on Friday, January 3, 2025. The stock has surged by nearly 35% in six sessions, and is trending ahead of its bonus issue announcement in the ratio of 5:1. Before the bonus, the consensus of recommendation on Gujarat Toolroom is BUY.
Gujarat Toolroom Share Price:
On January 3rd, the penny stock froze at its 5% upper circuit to Rs 18.98 apiece on BSE, with a market cap of Rs 440.46 crore. Upper circuit means that there were many buyers but no sellers in the stock and that has been the case for the past six sessions, giving a whopping 35% returns.
Gujarat Toolroom share's 52-week high and low are at Rs 45.97 apiece and Rs 10.75 apiece respectively.
Gujarat Toolroom Bonus Issue:
The company's board of directors are scheduled to meet on Monday, January 6, 2025, to consider and approve the proposal for the issuance of bonus shares in the ratio of 5:1 (five bonus equity shares for every one equity share) to the eligible equity shareholders of the Company as on the proposed record date by capitalisation of securities premium, subject to the approval of the shareholders of the Company.
This bonus issue comes after the interim dividend payout of Re 1 per share whose ex-date was on April 19, 2024. Also, the bonus issue comes after its first-ever stock split in the ratio of 1:10 which took effect from March 6, 2023.
The record date, ex-date and allotment date for the upcoming bonus shares will be announced after the approval on January 6th, if any.
In generic terms, some of the key advantages of bonus issue in case of investors perspective, as per brokerage Nirmal Bang are:
- Investors do not have to pay any tax while receiving bonus shares from the company.
- Bonus shares are considered beneficial for long-term shareholders of the company looking to multiply their investment.
- Bonus shares are free of cost to shareholders as they are issued by the company, which increases the outstanding shares of an investor in the company and enhances the liquidity of the stock.
- Bonus shares help build the trust of an investor in the company's business and operations because they have invested in the company and, in turn, give capital to the investor.
Gujarat Toolroom BUY?
According to MarketsMojo, Gujarat Toolroom, a microcap player in the engineering sector, has recently received an upgrade to a 'Buy' rating from MarketsMOJO as of December 31, 2024. This upgrade is attributed to the company's impressive management efficiency, highlighted by a remarkable return on equity (ROE) of 56.85%. Also, the company maintains a low debt-to-equity ratio of just 0.07 times, indicating a strong financial position.
For the last financial year, Gujarat Toolroom had a return on equity of a whopping 91.85%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit, as per Trendlyne data. Also, Debt to Equity Ratio is zero as the company is debt-free. Further, Promoter Pledges are zero.
About Gujarat Toolroom:
Gujarat Toolroom is among the trusted traders in rare gemstones and precious metals, providing high-quality gold, silver, diamonds, and other valuable resources to meet the demands of global markets. The company offers Mining With years of expertise in the mining sector. Accordingly, the company is engaged in a diverse range of industries.
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