This Company Will Give You 4 Shares For Every Share You Hold In The Entity: Check The Co. & Other Details

The additional shares that shareholders of this company will be receiving or will be entitled to receive will be issued to them as bonus shares. Primarily when the company does not intend to distribute its surplus as cash (dividend) to its shareholders they take this route. In a bonus share issuance, cash in the free reserves and surplus of the company is moved to capital. Now using this additional fresh capital, the company issues fresh equity shares to its eligible shareholders in some pre-decided ratio.

The company issuing bonus shares in the ratio of 4:1-Kewal Kiran Clothing

The small cap company from the retail-apparels and accessories segment was established in the year 1992. The company manufactures, markets as well as retails branded readymade apparels and finished accessories. With registered office in Mumbai, the company also serves customers in the Middle East, Asia and CIS or Commonwealth of Independent States. The company's top brand is 'Killer'.

Kewal Kiran Clothing is a fundamentally sound scrip but has been seeing a lag amid Covid on profitability

The 52 week low/ high for the stock is Rs. 774/1390- implying the stock has offered nearly cent percent return in 1-year period, doubling investors' money.

M-Cap - Rs. 1691 crore as on December 13, 2021

Currently the stock trades at a price of Rs. 1373 per share

Stock P/E- 29.41

RoE- 11.66%, the stock is slowly and gradually recovering from the aftermath of the Covid 19 pandemic

EPS-44.36

Debt to equity-0.11 as at the end of FY21, which is negligible considering the company's scale

Cash equivalent and free cash flow are at Rs. 176 and Rs. 94 cr., respectively,

Promoter holding in the stock is at a good 74%

Kewal Kiran Clothing Bonus Issue:

The company on October 28, 2021 announced this bonus issue in the ratio of 4:1 meaning 1 share in the company as on the record date for the bonus which is on December 17, 2021 will make you eligible to get 4 more shares at no additional cost. The ex-date for the issue is December 16, 2021. So, you have 3 more days i.e.13th, 14th and 15th December to buy the scrip for bonus shares.

How does the share price of the stock adjust post bonus issue?

Say if the ratio is 4:1 and the stock is currently priced at Rs. 1300 then it will get adjusted or lowered down to Rs. 1300/5 =Rs. 260 per share.

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