Kothari Products shares climb 7% after board recommends 1:1 bonus issue

Shares of Kothari Products rose 7.37 per cent at Rs 209.70 a piece on the BSE in Monday’s intraday trade. Kothari Products share price rose after the company’s board of directors recommended issue of bonus shares in the ratio of 1:1 i.e, one bonus share of one share held by the existing shareholders. 

 

The company informed that the bonus issue is out of free reserves created out of profits and bonus shares would be credited potentially by March 11, 2025. 

 

Bonus shares are additional shares issued to existing shareholders at no cost, based on the number of shares they already own, with the same face value as the original shares. Shareholders owning shares before the record and ex-dates are eligible to receive these shares. 

 

Issuing bonus shares allows companies to reward shareholders and enhance stock accessibility. While this increases the company’s share capital, it also results in a proportional reduction in the share price.

 

Kothari Products share price history

Kothari Products stock has underperformed the market in the last six months as it has risen 50 per cent, while gaining 60 per cent in the last one year. In comparison BSE Sensex has fallen 0.56 per cent in the last six months and risen 8.8 per cent in a year.

 

The company has a total market capitalisation of Rs 604.19 crore. Its shares are trading at a price to earnings multiple of 15.33 times at an earning per share of Rs 12.74.

 

At 11:00 AM, the stock price of the company advanced by 3.66 per cent at Rs 202.45 a piece on the BSE. By comparison, the BSE’s Sensex was up 0.01 per cent to 78,704.48 level.

 

Kothari Products Limited (KPL), the flagship company of the Kothari Group, was incorporated on September 17, 1983. The company operates in real estate and international trade while also manufacturing and exporting products like Pan Parag Pan Masala, Gutkha, and Parag Zarda in India. 

 

It markets its Pan Masala under the brand name "Pan Parag," flavored chewing tobacco under "Parag," and coconut oil under the "7-Up" brand. KPL's Pan Masala and Gutkha plants are located in Kanpur (Uttar Pradesh), Jorhat (Assam), and Noida (Uttar Pradesh), while its beverage production facilities are situated in Kanpur, Nadiad (Gujarat), and Thane (Maharashtra).