6:10 Bonus Shares, 1:10 Stock Split Rewards: Multibagger Penny Stock Doubles Investors Money In 6 Months

Multibagger and penny stock, Lorenzini Apparels have more than doubled investors' money in six months. The company witnessed a huge buying sentiment with stock touching an intraday high of Rs 453.80 apiece on BSE, which is near its 52-week high of Rs 475.20 apiece. The stock is in focus after the company announced massive rewards in the form of bonus issues and stock split.

On BSE, Lorenzini shares ended at Rs 436.60 apiece, up by 0.73% with a market cap of Rs 442.67 crore. In six months, the stock has gained by a whopping 118.3% on BSE, while the year-to-date upside is over 82%. In a year, the stock gives sky-high returns to the tune of 439%.

Lorenzini Apparels Stock Split:

The company will first carry a stock split. The ratio of 1:10 split means a division of every 1 (One) equity share of the nominal/face value of Rs. 10/- (Rupees Ten only) each into 10 (Ten) equity shares of the nominal/face value of Rs. 1/- (Rupees One only) each. In a stock split, the face value of an equity share reduces, while the number of shares increases in the portfolio.

The reason behind Lorenzini's stock split is to improve the liquidity of the Company's Shares to make it more affordable for small investors and also to broaden the base of small investors.

Also, Lorenzini said that consequent to sub-division/split in face value of Equity Shares from Rs. 10/- each to Re 1/-, resulting in 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).

The company plans to complete the stock split tentatively within 2 months from the date of the Board's approval.

Lorenzini Apparels Bonus Shares:

After turning the stock split, the next up is Lorenzini's bonus shares of the 6:11 ratio. This means that Lorenzini will issue Six Bonus Equity shares for every 11 (Eleven) fully paid-up Equity shares held] to the shareholders as of the record date (including holders of outstanding warrants convertible into Equity shares).

Bonus shares will be issued out of the Securities Premium account/retained earnings/ free reserves or any other permitted reserves/surplus of the Company available as of 30th September 2023. The total number of securities proposed to be issued is 60,967,020 Equity Shares of the 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.

The company plans to credit the bonus shares within 2 months from the date of Board approval. The record date for bonus shares will also be announced soon.

Lorenzini Apparels is engaged in the business of manufacturing, designing and marketing readymade garments offering a diverse range of men's formal, semi-formal & casual wear and women's casual wear. The Company serves its customers through the channels of retail and e-commerce. The Company has a few stores/outlets spread across various places in Delhi, Uttar Pradesh and Haryana. The Company has entered into a supply agreement with some of the e-commerce players. It also has a franchise model.

Disclaimer: The stock highlights about the split and bonus issue, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.