Multibagger small-cap stock approves 1:5 stock split, 2:1 bonus share issue; Do you own?

GTV Engineering Ltd. conducted its board meeting on Saturday, June 7, and announced a slew of corporate actions, which are likely to keep the multi-bagger small-cap stock in focus during the next market session. The board of the infrastructure and power generation giant considered and approved a stock split, a bonus issue, and increased the authorised share capital.

This is the BSE-listed firm's first-ever bonus issue. GTV Engineering is a diversified company with businesses in heavy engineering, hydropower, and flour milling. Erstwhile, Gwalior Tanks & Vessels Pvt Ltd in 1990, it later changed its name to GTV Engineering. It is a major supplier of heavy engineering goods to the cement, power, and mineral processing plants.

GTV Engineering stock split details

The company announced a stock split in the ratio of 1:5. The stock split is aimed at “enhancing the liquidity of the company's shares in the market and making them more accessible to retail investors”. The record date of the stock split will be decided and announced at a later stage.

GTV Engineering said in its regulatory filing to the stock exchanges, "The board has considered and approved sub-division/ split of the existing equity shares of the company, such that, each equity share having face value of ₹10 each fully paid-up, be sub-divided/split into such number of Equity Shares having face value of Rs. 2 each fully paid-up, subject to the approval of equity shareholders of the company through postal ballot.

"The record date for sub-division/split of existing equity shares shall be decided after taking the aforesaid approval of the equity shareholders of the company," it added. The board approved the amendment to Clause V of the Memorandum of Association for the purpose of sub-dividing the face value of equity shares from ₹10 each to ₹2 each. The revised capital structure is as under:

"Existing Clause V (Capital Clause): The authorized capital of the Company is ₹4,00,00,000 (four crore) divided into ₹40,00,000 (forty lakhs) equity shares of Rs. 10.

Proposed Clause V (Capital Clause): The authorized capital of the Company is ₹4,00,00,000 divided into ₹2,00,00,000 (two crore) equity shares of Rs. 2," said GTV Engineering in its stock exchange filing today.
 

GTV Engineering authorised share capital

"The board has considered and approved increasing the authorized share capital of the company from ₹4,00,00,00 to ₹12,00,00,000 subject to the approval of the members through postal ballot," said the company.

Pre Share capital:
1. Authorized Share Capital - ₹4,00,00,000 divided into 40,00,000 fully paid up shares having face of Rs. 10.00 each.

2. Subscribed and Paid up Share Capital - Rs. 3,12,38,880 divided into 31,23,888 fully paid up shares having face of Rs. 10.00 each.

Post share capital:
1. Authorized Share Capital - ₹12,00,00,000 divided into 6,00,00,000 fully paid up shares having face of ₹2.00 each. Subject to approval of shareholders through postal ballot.

2. Subscribed and Paid up Share Capital - Rs. 3,12,38,880 divided into 1,56,19,440 fully paid up shares having face of Rs. 2.00 each.

“Subsequent to the sub-division of shares, the board approved an increase in the authorized share capital of the company from ₹4 crore to ₹12 crore. The revised Clause V of the Memorandum of Association is as follows”:

Existing Clause V (Capital Clause): The authorized capital of the company is ₹4,00,00,000 divided into 2,00,00,000 equity shares of ₹2.

Proposed Clause V (Capital Clause): The authorized capital of the company is ₹12,00,00,000 divided into 6,00,00,000 equity shares of ₹2 each.

GTV Engineering Bonus Issue

"The board has considered and approved issue of bonus shares in the ratio of 2:1 (Two bonus equity shares for every one equity share) to the eligible equity shareholders of the company as on the proposed record date which will be declared in due course by capitalization of free reserves, subject to the approval of the shareholders of the company," said GTV Engineering.

The company said Rs. 6,24,77,760, consisting of 62,47,776 equity shares, would be issued as bonus shares. The bonus shares will be issued out of the company's free reserve and/or retained earnings, subject to the shareholders' approval.

Pre-bonus issue: Paid-up share capital as on date is 31,23,888 equity shares of face value of ₹10 each, aggregating to paid-up share capital of ₹3,12,38,880

Post-bonus issue: Paid-up share capital is 93,71,664 equity shares of face value of Rs. 10 each, aggregating to share capital of Rs. 9,37,16,640.

The small-cap company added that a free reserve of Rs. 6,24,77,760 is required for implementing the bonus issue. The actual paid·up share capital will be determined based on the paid-up share capital as on the record date.

GTV Engineering share price trend

On Friday, shares of GTV Engineering opened at ₹1,025.90 and gained nearly three per cent to hit an intra day high of ₹1,055.00 before settling 1.89 per cent higher at ₹1,034.55 apiece on the BSE. The heavy engineering company commands a market cap of ₹323.18 crore.

Shares of GTV Engineering have rallied eight per cent in five days and 50 per cent in one month. On a year-to-date (YTD) basis, the stock has rallied over 95 per cent and nearly 115 per cent in one year. The stock trades 3.3 per cent lower from its 52-week high mark of ₹1,070 apiece on the BSE. The stock's volume is 71,98. The 20-day average volume of 1,151 and the 20-day average delivery is 942.23 per cent. The book value per share of 151.30.

The small-cap stock has delivered multibagger returns to investors over the last one-to-five year period. GTV Engineering has given over 130 per cent returns in one year, nearly 690 per cent returns in three years, and massive 4,447.47 per cent in the last five years, making a multibagger favorite for investors.

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