Bonus share alert! Hardwyn India announces 2:5 bonus issue, record date awaited - small-cap stock jumps 2%

Hardwyn India bonus share: Hardwyn India, a manufacturer of kitchen, door, glass, wardrobe and sliding hardware solutions, rose over 2% on Tuesday, 9 June after it announced a bonus issue in the ratio of 2:5 for its shareholders. The announcement was made following a meeting of the company's board of directors held on June 5.

According to the exchange filing, the board approved the issuance of "bonus equity shares in the ratio of 2:5 i.e., 2 bonus equity shares of ₹1 each fully paid-up for every 5 equity shares of ₹1 each fully paid-up held by the shareholders of the company as on the record date, by capitalization of free reserves/retained earnings, subject to the approval of members in Extraordinary General Meeting".

The record date for determining shareholder eligibility for the 2:5 bonus issue has not yet been announced. The company stated that the bonus shares are expected to be credited or dispatched within two months of board approval, which means the process is likely to be completed by August 4.

The company has scheduled an Extraordinary General Meeting (EGM) on July 3, where shareholders will vote on the bonus issue proposal. June 26 has been fixed as the cut-off date for determining shareholder eligibility to participate in the voting process.

As part of the proposed bonus issue, Hardwyn India plans to issue nearly 19.54 crore new equity shares to eligible shareholders through the capitalisation of free reserves and retained earnings. The company's free reserves and retained earnings stood at ₹19.65 crore at the end of FY26.

A bonus issue involves the distribution of additional shares to existing shareholders without any extra cost. Such corporate actions are generally viewed as a reflection of a company's financial strength and growth prospects. While a bonus issue increases the total number of outstanding shares, it does not impact the company's market capitalisation. However, it can improve liquidity and make the stock more affordable for retail investors.

Alongside the bonus issue proposal, the board also approved an increase in the company's authorised share capital from ₹50 crore, comprising 50 crore equity shares of face value ₹1 each, to ₹70 crore, comprising 70 crore equity shares of face value ₹1 each.

Anand Rathi Picks Hardwyn India as Stock of the Month

In a report dated June 2, brokerage house Anand Rathi named Hardwyn India as its pick of the month, citing favourable technical indicators and the potential for further upside.

The brokerage noted that the stock is currently trading close to its 20 DEMA support level. It also highlighted that the DMI indicators remain positively aligned, while the ADX stands at 32, indicating strong trend strength and supporting the possibility of additional upward momentum.

Anand Rathi said traders may consider accumulating the stock in the ₹24.50- ₹25.50 range with a stop-loss at ₹22.50.

The brokerage further stated that the stock has the potential to move towards a target price of ₹30 in the near term, provided it sustains above the identified support levels. The target implies an upside potential of nearly 23% from the previous closing price of ₹24.41 per share.

Hardwyn India stock performance

The small-cap stock rose over 2% to its day's high of ₹24.94 on BSE on Tuesday. While the stock is down 3.5% in the last 1 week, it has added 42% in 3 months, 44% in 6 months and 69% in 1 year.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.