Maruti Suzuki Backed Bharat Seats Announces Bonus Shares Issue After 17 Years; Check Details

Bharat Seats Ltd, a player in the automotive components sector and a subsidiary of India's largest passenger car manufacturer, Maruti Suzuki India Ltd, has announced a development for its shareholders: the issuance of bonus shares. The company will grant one bonus share for each share held by shareholders as of the record date, which is yet to be established by the board. This decision is subject to approval from shareholders and necessary regulatory bodies.

This marks the first time in over 17 years that Bharat Seats is offering bonus shares; the last issuance occurred in 2007 when the company distributed one free share for every share held. The announcement has generated considerable interest among investors, with shares of Bharat Seats surging to a day's high, currently trading 2.9% higher at Rs 212. Notably, the stock has seen an impressive rise of 30% so far in 2024.

In conjunction with the bonus announcement, Bharat Seats reported its financial results for the September quarter. The company posted a net profit of Rs 7 crore, showing no significant growth compared to the previous year. However, revenue saw a modest increase of 1.7% year-on-year, totalling Rs 291 crore. The company's Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) grew by 4.7% to Rs 17.8 crore, while margins remained stable at 6%.

Bharat Seats categorizes Maruti Suzuki India as a promoter, reflecting its substantial involvement in the company. Maruti Suzuki holds a 14.81% stake in Bharat Seats, alongside Suzuki Motor Corporation, which holds a similar percentage. Additionally, NDR Auto Components, another listed entity, is recognized as a promoter, possessing a 28.66% stake in Bharat Seats as of the end of the September quarter.

The company specializes in manufacturing seating systems, noise, vibration, and harshness (NVH) components, and body sealing parts for both four-wheelers and two-wheelers. Bharat Seats is also involved in providing seating solutions for Indian Railways.

As Bharat Seats moves forward with its plans for the bonus share issue, investor confidence seems to be on the rise, reflecting the company's strategic efforts to enhance shareholder value. With the automotive industry recovering and expanding, Bharat Seats is well-positioned to leverage its expertise in the market, particularly in collaboration with its parent company, Maruti Suzuki.