Engineering and construction major Larsen & Toubro (L&T) today declared a 1:1 bonus issue. The last time the company declared a bonus was 20 years ago in the ratio of 3:5. | |
| However, the bonus announcement failed to cheer the sentiment at the L&T counter on a bearish Bombay Stock Exchange. The stock closed at Rs 1,988.30 on today, 6.59 per cent lower than yesterday's close of Rs 2,128.65. |
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| L&T, which is likely to announce a joint venture initiative tomorrow, said in a press statement the bonus was being issued by capitalising a part of the reserves. |
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| "This is declared in deference to a long-standing shareholder expectation. It will increase L&T's capital base to a level that will better reflect its current scale of operations. This issue will add depth and eventually create a larger market float in terms of the number of L&T shares, thus increasing liquidity and turnover of the company's shares," the release said. |
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| The bonus issue is subject to the approval of the shareholders in the annual general meeting. L&T's first issue of bonus shares was in 1973, when one bonus share was issued for every three shares. Subsequently, bonuses were made in 1977 (1:2), 1982 (3:5) and 1986 (3:5). |
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| The company has 13.73 crore of equity shares with face value of Rs 2 each. L&T has posted 40 per cent growth in net profit at Rs 466.85 crore for the quarter ended March 31, 2006, compared with Rs 333.68 crore in the previous corresponding period. |
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| The company's total income, during the fourth quarter of the year, has increased from Rs 4,364.95 crore to Rs 4,744.97 crore, an increase of 8.7 per cent. |
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