KKN Gurugram Desk | In an exciting development for investors, Kothari Products Ltd is set to join the list of companies offering bonus shares for the second or more time. The company has announced a 1:1 bonus share issue, meaning that for every share held, investors will receive an additional share for free. This move is expected to attract attention from retail and institutional investors alike, especially considering the company’s stock is trading at less than INR 200 per share.

Kothari Products Ltd to Issue Bonus Shares: Key Details

Kothari Products Ltd has made a significant announcement regarding its upcoming bonus share issue. The company has decided to issue one bonus share for each share held by investors. The record date for this bonus issue has been set for February 18, 2025. This means that any investor holding Kothari Products Ltd shares on or before this date will be entitled to receive one additional share for every share they currently own.

The bonus share issue is an attractive offer for existing shareholders, as it increases their stockholding in the company without any additional cost. Bonus shares are typically issued by companies to reward existing shareholders and to make their stock more accessible to a wider group of investors by reducing the per-share price.

Kothari Products Ltd’s History of Bonus Shares and Dividends

Kothari Products Ltd has a history of issuing bonus shares and dividends to its shareholders. The company’s first bonus share issue took place in 2014. At that time, Kothari Products Ltd issued a dividend of INR 2 per share to its investors. The company repeated this gesture in 2016 when it issued a 2:1 bonus share issue, meaning for every two shares held, investors received one additional share.

In addition to bonus shares, Kothari Products Ltd has also rewarded its shareholders with dividends over the years. The last dividend was paid out in 2019, when the company issued a dividend of INR 1 per share. The company has been consistent in distributing dividends and bonuses, which makes it an attractive investment option for long-term investors.

Kothari Products Ltd’s Stock Performance Over the Past Year

Let’s take a closer look at how Kothari Products Ltd’s stock has performed over the past year. As of the latest market data, Kothari Products Ltd’s share price was INR 176.80, reflecting a slight decline of 1.23% from the previous trading session. While the stock price has seen a dip recently, it has experienced significant growth over the past year. In fact, Kothari Products Ltd’s share price has increased by 21% over the last 12 months.

For comparison, the BSE Sensex, which tracks the performance of India‘s top 30 stocks, has seen a more modest increase of 5.73% during the same period. This means that Kothari Products Ltd has outperformed the broader market in terms of stock price appreciation over the past year.

It’s important to note that the company’s stock has also seen some volatility in the past. The 52-week high for Kothari Products Ltd’s share price was INR 227.35, while the 52-week low was INR 111.15. This indicates that the stock has experienced significant price fluctuations, which can be an important factor for potential investors to consider before making investment decisions.

Why Are Bonus Shares a Good Investment Strategy?

Bonus shares are generally issued by companies to capitalize on their retained earnings. By issuing bonus shares, a company essentially splits its equity, increasing the number of shares in circulation but keeping the overall value of the company unchanged. This can be an attractive option for investors as it provides additional shares without requiring any further financial outlay.

Moreover, bonus shares can make the stock more affordable for new investors by lowering the per-share price. For example, if a company with shares priced at INR 200 issues a 1:1 bonus, the share price would effectively reduce to INR 100, making it more accessible to a wider range of potential buyers. This increased liquidity can help drive up demand and, in turn, boost the stock price over the long term.

From an investor’s perspective, receiving bonus shares is seen as a sign of the company’s strong financial health and a reward for their continued support. It can also serve as a method to reinvest earnings, which can be more tax-efficient than paying out cash dividends, depending on the investor’s location and tax status.

Kothari Products Ltd: A Solid Investment for Long-Term Growth

Despite recent fluctuations, Kothari Products Ltd’s stock has shown positive long-term growth, making it an attractive option for investors looking for potential capital appreciation. The company’s consistent history of issuing bonus shares and dividends indicates a shareholder-friendly approach. Moreover, the fact that the company has been able to increase its stock price by 21% over the past year, despite a broader market gain of just 5.73%, shows its resilience and strong fundamentals.

For investors looking to capitalize on bonus shares, Kothari Products Ltd presents a unique opportunity. The bonus share issue scheduled for February 18, 2025, adds an extra layer of appeal for those holding the stock in the coming weeks.

However, potential investors should carefully consider the risks associated with investing in the stock. As mentioned earlier, Kothari Products Ltd has experienced volatility in the past, with significant fluctuations in its 52-week high and low prices. This volatility may continue in the short term, making it important for investors to assess their risk tolerance before making any decisions.

The Future Outlook for Kothari Products Ltd

Looking ahead, the future outlook for Kothari Products Ltd seems promising. The company has shown consistent growth in terms of both stock price and dividends, and the upcoming bonus issue will likely add further value for its investors. If the company continues to perform well and expand its market share, the stock could see further price appreciation in the future.

In addition to its bonus shares and dividend payments, Kothari Products Ltd’s financial stability and shareholder-friendly policies may attract more institutional investors in the coming years. As the company continues to strengthen its market position and expand its product offerings, it could potentially deliver significant returns for long-term investors.

Kothari Products Ltd’s decision to issue bonus shares is an important development for both current shareholders and potential investors. The 1:1 bonus issue scheduled for February 18, 2025, is an attractive opportunity for those holding the company’s shares. With its strong financial history, consistent bonus and dividend payments, and positive stock performance over the past year, Kothari Products Ltd is an appealing option for investors seeking long-term growth.

However, as with any investment, potential investors should carefully assess the risks involved. The stock has experienced some volatility in the past, and while it has shown strong growth, past performance is not always indicative of future results. It is essential for investors to stay informed about the company’s developments and the broader market conditions to make well-informed investment decisions.