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Business News/ Markets / Stock Markets/  Bonus shares six times in 10 years. Do you own this auto sector stock?

Samvardhana Motherson International Limited's (formerly know as Motherson Sumi Systems Limited) has been one of the Indian companies who has consistently rewarded to its shareholders over the long term in a way of issuing bonus shares. The auto ancillary company has declared bonus issues six times in the last 10 years i.e., since 2012, with all announced in the ratio of 1:2.

The recent bonus shares issue of the company has been announced in August this year as the board recommended the issue in the ratio of 1:2, subject to shareholders' approval. “The board of directors of the Company in its meeting held, i.e., August 16, 2022, has recommended issue of bonus shares in the ratio of 1 (one) bonus equity share against 2 (two) existing equity shares, subject to approval of the shareholders," the company had informed in an exchange filing.

The company said that the bonus shares will be issued from securities premium account. Bonus shares are fully paid additional shares issued by a company to its existing shareholders.

Prior to the recent bonus issue announcement, the last five bonus issues by the company were done in October 2018, July 2017, July 2015, December 2013 and October 2012, all in the ratio of 1:2, as per data by Capitaline. 

Motherson Group is a leading manufacturers of components for the automotive and transport industries. As part of the group's reorganisation activity, the name of Motherson Sumi Systems Limited (MSSL) has now been changed to Samvardhana Motherson International Ltd (SAMIL). For the first quarter ended June 2022, Samvardhana Motherson's net profit increased to 141 crore, whereas its revenue was at 17,712 crore during Q1 FY23.

The de-merger of domestic wiring harness (DWH) business and merger with parent entity happened in January this year and the shares listing of Motherson Sumi Wiring India Limited (MSWIL) happened in March. MSWIL is a joint venture between Samvardhana Motherson International Ltd (SAMIL) and Sumitomo Wiring Systems.

In April last year, MSSL had informed stock exchanges that public shareholders voted in favour of the proposal with an overwhelming majority, paving the way for successful completion of the proposed restructuring.

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Updated: 31 Aug 2022, 12:39 PM IST
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