Cigarettes and tobacco products company, Godfrey Phillips India Ltd had made a big update on its bonus issue proposal in the ratio of 2:1. In a board meeting held on September 20, the tobacco company announced that it needs clarification from RBI regarding its disbursement of bonus shares to NRIs or foreign investors.
Godfrey Phillips Bonus Issue:
After market hours of September 20, Godfrey's stock price ended at Rs 7609.15 apiece, down by 2.09% with a market cap of Rs 39,562.95 crore. However, this does not stop Godfrey from emerging as a multibagger stock of 2024.
The stock's 52-week high and low is at Rs 8,480 apiece and Rs 1,994.90 apiece respectively. The stock's price-to-equity ratio is at 48.81x, while its return on equity is at 21.10%.
In the trading week that ended on September 20, Godfrey's share is up by 0.50%. While its monthly performance sees a double-digit upside of 35.50%. On BSE, the stock has rallied by a whopping 267.80%. The stock was merely at Rs 2,087.55 during the start of January 2024.
Godfrey Phillips Bonus Issue:
In its board meeting on September 20, the company's directors considered the matter of issuance of Bonus Shares.
Godfrey said, "After detailed discussions, it was decided that the Company needs to seek appropriate clarification/approval from the Regulator i.e. Reserve Bank of India (RBI) in respect of the issue of Bonus Shares to the Non-Resident shareholders (including those covered under the Foreign Direct Investment (FDI) and Foreign Portfolio Investment), having regard to the fact that the Company is engaged in manufacture of cigarette and other tobacco products wherein FDI is currently prohibited. "
Accordingly, Godfrey added, "The Board decided that on receipt of the necessary clarification/approval from RBI, Board meeting will be subsequently convened to approve the issuance of Bonus Shares and undertake necessary steps to implement the decision thereafter."
The company has proposed to offer a bonus issue of a 2:1 ratio which is its first ever. The ratio means that Godfrey Phillips will allot 2 new fully paid-up Equity Shares of Rs. 2/- each for every 1 (One) existing fully paid-up Equity Share of Rs. 2/- each, to the Equity Shareholders of the Company by capitalization of reserves.
The company carried a stock split of 1:5 ratio in November 2014, where the face value of Rs 10 each was split to Rs 2 each. While Godfrey Phillips has delivered 25 dividends since April 2000.
In FY24, the company delivered its highest-ever dividend of Rs 56 per share, followed by Rs 44 per share in FY23.
About Godfrey Phillips:
Godfrey Phillips India Limited, a flagship company of Modi Enterprises - KK Modi Group, is one of the largest FMCG companies in India. Some of the company's iconic cigarette brands are Four Square, Red & White, Cavanders, Stellar, Focus, Originals International and others. Also, the company has manufactured and distributed the global cigarette brand, Marlboro, in India under arrangement with Philip Morris. Along with a strong cigarette and tobacco portfolio, the company also has a strong confectionery portfolio with Funda and have unique offerings for international markets.
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