In Wednesday’s opening trades, shares of REC Ltd increased to 103 per share on the BSE as the stock began trading ex-bonus one day before its record date for the bonus shares issue that it had advised in a 1:3 ratio.
Public company REC Limited, formerly known as Rural Electrification Corporation Limited, previously declared that its board has approved issuing bonus shares in a 1:3 ratio and set the record date for the same as the following Thursday, August 18, 2022.
According to information provided by REC in an exchange filing, “The Board of Directors has recommended issuing Bonus shares to the shareholders of the Company in the ratio of 1:3, i.e., one (1) bonus equity share of $10 each fully paid-up for every three (3) existing equity shares of $10 each fully paid-up to the eligible members, subject to the approval of shareholders through postal ballot.”
The proposal to issue 65.83 crore bonus shares using 658.3 crores in capital reserves was approved by shareholders last week. Bonus shares are additional, fully paid shares that the firm issues to its existing owners.
“Two resolutions as set forth in the Postal Ballot Notice dated July 8, 2022, of the Business, have been passed by the shareholders with requisite majority,” the company stated in an exchange filing. The resolutions approved the appointment of Vivek Kumar Dewangan as chairman and managing director, the capitalisation of reserves, and the issuance of bonus shares to the company’s shareholders.
The Ministry of Power has administrative supervision for REC Limited, a Navratna organisation. In addition to domestic borrowing, it uses market borrowings of different maturities, such as bonds and term loans, to finance its operations.
On the strength of lower expenses, state-owned REC Ltd reported an 8per cent improvement in its consolidated net profit at 2,454 crores for the first quarter ended June 30 as compared to 2,268.6 crores in the corresponding quarter last year. However, the total revenue decreased from 9,555 crore year over year to 9,506 crores in the period under review (YoY).