Shares of the Oberoi Group’s flagship company, EIH Associated Hotels, skyrocketed 9% and hit a 52-week high of Rs 925 on 14 June ahead of the company’s board meeting today. 

The board will meet to discuss and approve the issuing of bonus shares to equity shareholders of the company.

In its regulatory filing, the company said, “The meeting of the Board of Directors of the Company will be held on Friday, June 14, 2024, to consider and recommend, interalia, capitalization of reserves by issuing Bonus Shares to the Equity Shareholders of the Company, subject to the approval of the Shareholders.”

This will be the company’s first-ever bonus issue, according to the data available on the exchanges. 

A bonus issue involves a company distributing free shares to its existing shareholders, sometimes as an alternative to dividend payouts. Companies issue bonus shares to utilise their accumulated reserves, enhance their Earnings Per Share (EPS), increase paid-up capital, and reduce reserves.

Shareholders receive bonus shares at no extra cost, often referred to as free shares. Investors must purchase the stock before the ex-date to be eligible for bonus shares. Investors who buy shares on or after the ex-date are not entitled to receive bonus shares.

EIH Associated Hotels is a subsidiary of the Oberoi Group, which operates and manages 20 hotels under the prestigious Oberoi Hotels & Resorts brand and 10 five-star properties under the Trident Hotels brand.

In addition to its hospitality operations, the company offers various other services, including flight catering, airport restaurants, travel and tours, car rentals, project management, and corporate air charters.

At 1:48 pm, the shares of EIH Associated Hotels were trading 4.04% higher at Rs 880 on NSE.