2:1 Bonus Shares: Metal Stock Trades Ex-Bonus On Tuesday; Buy/Sell Or Hold?

In the metal industry, Rama Steel Tubes Ltd. is a small-cap company. As of Monday's closing session, its market valuation was Rs 1,887.09 Cr. Founded in 1974, the firm is among the top producers of steel pipes, tubes, and G.I. pipes in India. With a 20% export rate, the firm has operations around the world, with its primary markets being the United Kingdom, United Arab Emirates, Sri Lanka, Ethiopia, Kenya, Uganda, Ghana, Kuwait, Republic of Congo, Yemen, Guyana, Germany, USA, South Africa, Zambia, and Malta. On Tuesday, March 19, Rama Steel Tubes will trade ex-bonus at a 2:1 ratio. On Monday, the BSE saw the stock close 0.62% down at Rs 38.25 a share, ahead of the ex-bonus day. Shares purchased after the ex-date are no longer eligible for the bonus, which is known as the "ex-bonus." The record date for evaluating a shareholder's eligibility for the proposed bonus issue has been set at March 19, 2024.

Rama Steel Tubes Bonus Shares

The Board of Directors at its meeting held on January 24, 2024, has inter-alia, considered and approved "Issue of Bonus Shares in the proportion of 2:1 i.e. 2 (Two) fully paid-up bonus equity share of Rs.lj- (Rupees One only) each for every 1 (One) fully paid-up equity share of Rs.lj- (Rupees One only) each held by the Members of the Company as on the Record Date, subject to approval of Members of the Company through Postal Ballot," said the company in a regulatory filing.

"We wish to inform that pursuant to Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has fixed Tuesday, March 19, 2024, as the record date, for the purpose of ascertaining the eligibility of shareholders entitled for issuance of Bonus Shares. The Bonus Shares, once allotted, shall rank pari-passu in all respects with and carry the same rights as the existing equity shares and shall be entitled to participate in full in any dividend and other corporate action, recommended and declared after the new equity shares are allotted," said Rama Steel Tubes in a stock exchange filing dated March 06, 2024.

Rama Steel Tubes Financials

The firm reported a net profit of Rs 9.17 crore for the quarter that ended on December 30, 2023, up 22.92% from Rs 7.46 crore for the same period the previous year. Sales for the firm dropped by 25.08% in the quarter ending in December 2023 to Rs 262.39 crore from Rs 350.25 crore in the corresponding quarter of the previous year. Rama Steel's overall income for the December 2023 quarter was Rs 265 crore, down from the Rs 355.95 crore reported in the same period in the previous year. From Rs 347.59 crore in Q3 of the previous fiscal year to Rs 254 crore for Q3 of the current fiscal, the company's expenses dropped. EBITDA jumped by 25.74% from Rs. 15.27 crore in Q3FY23 to Rs. 19.20 crore in Q3FY24.

Rama Steel Tubes Share Price Target

Rama Steel Tubes is bearish on the Daily charts with strong resistance at 42.6. A daily close below support of 32.5 could lead to a target of 28 in the near term, said AR Ramachandran from Tips2trades.

Disclaimer

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